Bitcoin soars to record high of $3,400 in a post-forking world

8 Aug 2017

The forking of bitcoin. Image: Adrian Today/Shutterstock

It was seen as a make-or-break moment, but its forking into two currencies has left bitcoin in a better position than it’s ever been.

The ‘forking’ of bitcoin into two different cryptocurrencies – bitcoin and bitcoin cash – initially sparked fears of major damage being done to both, but, more than a week later, this seems to be far from the case.

At the time of writing, bitcoin’s price currently stands at $3,443, having risen by more than $1,000 in just a matter of days as investors begin to put their wariness to one side and reinvest in the cryptocurrency.

Future Human

On Monday (7 August), it reached a record high of $3,451, meaning that so far this year, the currency has tripled in price and increased by almost 20pc in August alone.

To put this into perspective, CNBC reported that bitcoin’s market capitalisation currently stands at around $56bn, whereas one of the US’s largest companies – General Motors – sits at a cap of $51bn.

Fork in the road

The new price shows that bitcoin was able to survive the major forking event of 1 August, which was brought on by the realisation among its massive community of users that if it were to go mainstream, its technology would be severely limited.

Based on blockchain, bitcoin (until recently) could only perform seven transactions per second due to the 1MB limitation on each individual block. This put it way behind traditional currencies in terms of capacity, resulting in a ‘civil war’ of debate over how to increase it.

Under the new bitcoin technology called Segwit2x, a parallel blockchain was created to work alongside the existing one, thereby easing the burden and allowing faster transactions. Expectations are that the blocks will double in size by the end of this year.

Bitcoin recovers from slump

Meanwhile, competitor bitcoin cash has created a system to increase the block capacity from 1MB to 8MB.

Speaking to CNBC about the reasoning behind this new bitcoin surge, founder of financial firm Standpoint Research, Ronnie Moas, said it was all down to market confidence.

“If there’s something that shakes people’s confidence in crypto, then they will sell off. The further we get into this game, the less likely you will get something like that,” he said.

Moas recently predicted that by the end of next year, bitcoin could reach a price of $5,000.

Meanwhile, bitcoin cash has shown that it can survive a slump, but still lags considerably behind its older sibling.

At the time of writing, the newest cryptocurrency is priced at just under $340, whereas last week it was priced as low as $280, having fallen from its current record price of $756.93 on 2 August.

Colm Gorey was a senior journalist with Silicon Republic