World Economy

Bitcoin Cash Arrives

The new currency was trading at about $215 on Tuesday, while the original version was around $2,750.The new currency was trading at about $215 on Tuesday, while the original version was around $2,750.

Bitcoin, the world’s most famous digital currency, split in two on Tuesday. So now there are two versions: The original one and a new type of online money called Bitcoin Cash, which is now being bought and sold at online exchanges.

The new currency was trading at about $215 on Tuesday, and, in what might come as a surprise, its arrival has not undercut the value of the original version. As of mid-afternoon, the price of bitcoin proper was around $2,750—not far below its all-time high of just above $3,000, Fortune reported.

There was an initial spike when the new currency hit the market Tuesday afternoon, followed by a series of dips. The earlier prices were based on a tiny sample of trades so the more recent ones, between $200 and $300, may be a better indication of its underlying value—though given the enormous volatility in digital currency markets, tomorrow may be a different story.

So far, the trades indicate the new currency is worth about 7% to 10% of the old one.

If Bitcoin Cash continues to trade at any significant value, it could create enormous pressure for the likes of Coinbase, which is the most popular digital currency exchange, to distribute the new currency to its customers.

As it stands, Coinbase is standing by its controversial decision of last week not to support Bitcoin Cash. This means many bitcoin owners using Coinbase all of which are entitled to receive Bitcoin Cash at a one-to-one ratio, are seeing their new “cash” sit in a sort of limbo.

One reason for this is Coinbase and others dislike the idea of Bitcoin Cash because it relies on a so-called “fork” of the software which runs the bitcoin blockchain, and on which all transactions are recorded.

The creation of multiple forks could undermine the network effects that help support the popularity of bitcoin. A source close to Coinbase, who asked to speak anonymously, also told Fortune that a new currency like Bitcoin Cash is akin to a new product, and it can be time-consuming and expensive to create secure infrastructure to trade it.

The Bitcoin Cash fork came about after a group of miners, who are responsible for recording bitcoin transaction records, decided to implement a new version of the software that governs the bitcoin blockchain.

A dispute among developers of virtual currency Bitcoin gave birth Tuesday to a new version of the crypto coin after they failed to agree on software changes.

Following Tuesday’s announcement its market value was almost unchanged at $2,775.03 according to data compiled by Bloomberg, which collates readings from the crypto unit’s largest exchanges.

That compares to an all-time high on June 12 of $2,999.97—equating to a 222% rise on the start of the year.

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