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Bitcoin facing a potential split

(Image credit: Image Credit: Julia Tsokur / Shutterstock)

The code behind Bitcoin could be split this Tuesday in a major schism for the world's most notorious cryptocurrency.

The news was reported by Reuters (opens in new tab) , which said that the move could lead to the creation of a parallel currency called Bitcoin Cash. 

The minds behind the split appear to be primarily Chinese-based Bitcoin miners who are unhappy with the way the technology is being improved. For that reason, they’ve suggested a “fork” – meaning  the blockchain could be split into two potential paths, potentially meaning a new currency and a strong competitor to Bitcoin (opens in new tab)

However it is still unclear if it will actually go through or how much Bitcoin Cash would be worth. 

The biggest dispute lies in the fact that whoever owns Bitcoin would have an equal amount of Bitcoin Cash for free.

"This is somewhat like a stock split," said Jeff Garzik, chief executive and co-founder of Bloq, a blockchain company. "You go to sleep with 100 bitcoins and wake up in the morning with 100 bitcoins plus 100 'Bitcoin Cash', a new token."

A similar move had been expected to happen two weeks ago, but was averted when developers and miners agreed on a software upgrade called the Bitcoin Improvement Proposal (BIP) 91.

According to Reuters, futures of Bitcoin Cash are already trading on certain exchanges at around $282.40. Bitcoin traded at $2,806.27.

Some currency exchanges and digital wallet providers will not support Bitcoin Cash, others will. 

"We do not want to support any behaviour whereby anyone can potentially split the bitcoin blockchain and effectively create free money out of nothing," said Greg Dwyer, head of business development at BitMEX.

Kraken and Bitfinex will allow users to trade Bitcoin Cash.

Image Credit: Julia Tsokur / Shutterstock

Sead Fadilpašić is a freelance tech writer and journalist with more than 17 years experience writing technology-focussed news, blogs, whitepapers, reviews, and ebooks. And his work has featured in online media outlets from all over the world, including Al Jazeera Balkans (where he was a Multimedia Journalist), Crypto News, TechRadar Pro, and IT Pro Portal, where he has written news and features for over five years. Sead's experience also includes writing for inbound marketing, where he creates technology-based content for clients from London to Singapore. Sead is a HubSpot-certified content creator.