The prospect of a controversial upgrade that would see the cryptocurrency split in two has recently caused major disagreements in the bitcoin community. The SegWit2x fork was planned for the middle of November but an increasing number of developers had expressed their concern about it in the last few months.
This disagreement has finally led to the group behind the SegWit2x upgrade suspending it until there is more agreement in the community about the way forward. When this news came out on Wednesday it almost immediately caused the price to shoot up to a new record high of $7,879.06 (£6020).
A few hours later the price had dropped back close to just over $7,000 before rallying back to around $7,250. Analysts are now divided over whether it is likely to climb again or not.
The idea behind SegWitx2 is to improve bitcoin transactions in terms of both speed and cost. Yet, it has been a divisive subject in the digital currency’s community in recent times.
A leading group of bitcoin developers brought out a statement saying that their goal “has always been a smooth upgrade for bitcoin”. They went on to say that it is clear that they have “not built sufficient consensus” in order to carry out the upgrade at this time.
The developers noted that carrying on with plans for the upgrade could “divide the community”, which they say was never their goal. They also noted that they hope the community will work together to solve the problem of rising fees, and are “suspending” plans for the upgrade in the meantime.
This statement was made by 6 of the leading bitcoin figures, people such as Blockchain CEO and co-founder Peter Smith, Xapo CEO Wences Casares and BitGo CEO Mike Belshe.
Volatility in the Markets
Part of the reason why views on bitcoin splits are so divided is probably down to the fact that the price increased following the hard forks carried out earlier this year. Many people were wary of splits until bitcoin cash and bitcoin gold showed that they could be a good thing for the value of bitcoin rather than something to fear.
The volatility in the markets following news of the suspension of SegWit2x probably reflected the complexity and unexpected nature of the announcement. While some viewed it as a positive way to end uncertainty, others had invested in the currency hoping to gain from the split and sold up when it was suspended.
While this was going on, a new survey on how millennials invest showed that many of them are shunning traditional investments in favour of digital currencies. The study was carried out by venture capital firm Blockchain Capital and showed that 30% of millennials would choose bitcoin over stocks or government bonds.
In fact, 42% of people in this group know of bitcoin, while only 15% of those aged 65 and over know about it. The survey covered 2,000 people and also revealed that just 2 out of every 100 Americans own or have owned a cryptocurrency.