There was big news in the blockchain field last week as Bitcoin experienced a “hard fork” and split into two currencies. More people using Bitcoin has led to slower transaction processing times, leading many to suggest that Bitcoin blocks should be expanded so that they process more transactions at once. A large group of users agreed to a multi-part proposal slated to take effect later this month to help solve the issue, but a smaller minority backed a proposal to increase block-size more drastically from 1MB to 8MB. On August 1st, one of the backers of the rival proposal successfully mined a block that was bigger than the standard 1MB size limit. Backers of the 8MB proposal considered this a valid block and added it to the ledger, while most other users did not. The result was that Bitcoin's ledger diverged into two separate versions, effectively created two separate currencies.
Some worried that the resulting currencies would become unstable and crash, while others pointed out that forks have also happened to traditional physical currencies including the dollar without any disastrous consequences. It seems the latter camp was right, as the 1MB-limited Bitcoin (BTC) has essentially maintained the same value as Bitcoin pre-split, while the alternative currency that allows blocks up to 8MB, dubbed Bitcoin Cash (BCC), is worth less and more volatile but still retains substantial value. Since both ledgers are identical up until the split, anyone who held a Bitcoin before is now recognized in the twin ledgers as owning a coin in each of the resulting currencies. Various Bitcoin wallets and exchanges are already beginning to also support Bitcoin Cash, suggesting both currencies are here to stay.