Several bitcoin exchanges globally have adopted a cautious approach before an alternative version of the cryptocurrency — known as Bitcoin Cash — is introduced on Tuesday.
In the past few days clarity emerged that a majority of bitcoin stakeholders preferred to stay with the original version and supported the introduction of a faster trading mechanism from August 1.
India’s leading exchanges had earlier advised investors that they should transfer their coins from exchange wallets to private wallets.
Since Monday night, however, they have been telling investors there would be no “send/receive of coins” and only trading would continue. All this is being done as a precaution as around five per cent of Bitcoin stakeholders or a minority group of miners have created an alt coin called bitcoin Cash. This will come into existence on August 1. However, a majority of the community seems to have rejected this. Bitcoin’s price is near its all-time high, but most exchanges are taking extreme precautions and have suspended some operations.
Bitcoin was trading at $2,850 on Tuesday morning, while in India it traded at Rs 1.85 lakh. It settled at Rs 1.75 lakh an hour before the launch of Bitcoin Cash. Shortly after the introduction of the new currency, Bitcoin was trading at around $2,680, even though it didn't move much on Indian exchanges. Market experts believe the price of Bitcoin as of now may be inflated ahead of the introduction of Bitcoin Cash. A clear picture of acceptability of the new currency will emerge by Wednesday, said an official of an Indian Bitcoin exchange.
Bitcoin’s underlying software code is being split to create Bitcoin Cash.
Bitcoin averted a split two weeks ago, when its software developers and miners agreed to implement a software upgrade called the bitcoin Improvement Proposal (BIP) 91.
BIP 91 was the first step towards a larger effort to upgrade Bitcoin through software called SegWit2x, which would make the network faster at processing transactions, such as payments using the virtual currency.