Sun, Nov 12, 2017 - Page 16 News List

Bitcoin falls after upgrade cancelation

MISGIVINGS:The main architects behind the expected upgrade to bitcoin’s underlying software canceled their plans to avoid deepening divides in the developer community


Bitcoin continued its retreat from a record high after traders weighed in on the cancelation of a technology upgrade that threatened to disrupt the biggest cryptocurrency.

Investors who were expecting the extra coins stemming from a split of the chain might be taking profits, while others who are disappointed that the update was scrapped earlier this week might be switching to alternative coins, said Charlie Lee (李啟威), founder of litecoin, the fifth-largest cryptocurrency by market value.

While bitcoin soared to a record US$7,882 within minutes of news that it would avoid another split on Wednesday last week, the gains have evaporated. Bitcoin is now trading more than US$1,000 below where it was after a faction of the community scrapped plans for a so-called hard fork. Bitcoin was down 8 percent to US$6,575 at 2:19pm in New York on Friday.

Some speculators are disappointed that they will not get the additional coins that would have been created by a hard fork.

While bitcoin splits are potentially disruptive, they have so far amounted to free money for holders of the cryptocurrency. Bitcoin Cash, the result of a hard fork in August, has climbed to about US$900 from as low as US$565 on the day the split was canceled, while bitcoin has slipped almost 10 percent after touching a record right after the news.

The main architects behind a change to its underlying software, known as SegWit2x, canceled their controversial plans on Wednesday last week, saying they wanted to avoid deepening divides in the developer community.

Bitcoin developers, users and miners — those running computers that crunch the complex math required to verify transactions — have been trying to agree on ways to make transactions faster, as the network’s growing popularity has led to congestion.

After an initial upgrade in August known as SegWit, short for “Segregated Witness,” a group in the bitcoin community was calling for SegWit2x. The second upgrade had not gained as much support and was only a week away from confronting bitcoin with one of its hardest tests ever.

Bitcoin had climbed from about US$6,00O since CME Group Inc, the world’s largest exchange owner, said on Oct. 31 that it wants to offer bitcoin futures by the end of the year, only a month after dismissing such a plan. Cboe Global Markets Inc said in August that it wants to sell futures. Both need approval from the US Commodity Futures Trading Commission.

Skeptics of the digital currency, from billionaire Warren Buffett to JPMorgan Chase & Co chief executive officer Jamie Dimon, have warned that bitcoin is a speculative bubble in danger of bursting after its almost sevenfold increase this year.

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