Bitcoin cash surges 38% as investors dump bitcoin

10.11.2017 / 16:04

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Bitcoin cash, the cryptocurrency that split off from Bitcoin earlier this year, is closing in to an a new all-time high.

Analysts say that the surge is due to the developers abandoning the plans for SegWit2x, a planned upgrade to the software behind the regular Bitcoin that would have improved transaction speed on the network and lower the transaction fees.

Joshua Raymond, a director at forex and CFD broker XTB, told Business Insider: "The delay to Segwit2x has damaged confidence amongst bitcoin investors concerning the much-needed resolution to speed up bitcoin's slow processing speed."

"Everyone was hoping the Segwit2x would address this but unfortunately, the delay due to a lack of consensus on the mechanics has affected confidence. Confidence on transaction speed in Bitcoin has deteriorated significantly in recent months. As Bitcoin Cash enjoys much faster transaction speeds, we have started to see a recycling of positions out of Bitcoin into Bitcoin Cash as a consequence."

Bitcoin cash was created in August by "forking" the blockchain record that underpins bitcoin, creating a parallel network. A "fork" is when a new cryptocurrency is made, based on the blockchain transaction history of Bitcoin. Thus if you had 5 Bitcoins prior the fork you would have also 5 BitcoinCash after the fork. Bitcoin cash allows for bigger "blocks" transaction to be processed, speeding up the network - 8MB per block compared to the 1MB block of Bitcoin, which means that BitcoinCash is about 8 times faster and cheaper than Bitcoin, at least that's the plan.

SegWit2x was a proposed update to bitcoin's network that would have sped up transactions. However, not enough participants agreed on the proposal and its implementation risked "forking" the network again. As a result, the project was abandoned on Wednesday.

Bitcoin Cash all time chart

Source: Business Insider
Eng. Yanislav Kutsarov

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Bitcoin cash surges 38% as investors dump bitcoin

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