Could bitcoin split in two? The clock is ticking on the critical decisions

 
Courtney Goldsmith
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Bitcoin's price dipped today ahead of key decisions (Source: Getty)

A debate which has been simmering in the bitcoin community for years will soon take centre stage as key decisions in determining the future of the cryptocurrency are made in the coming weeks.

Investors face a number of outcomes as rival software updates which are due at the end of the month threaten to split bitcoin in two.

Bitcoin was trading 3.31 per cent lower today at $2,286.31, according to CoinDesk data.

Read more: Ether dips below $200 on the cryptocurrency's second day of losses

Bitcoin transactions are gathered into so-called "blocks", and developers have been embroiled in a long-running debate over the size limit of a block.

Currently, there is a cap on how many transactions can be processed, causing slower transaction times and higher processing fees.

Developers have proposed a solution called SegWit which would manage some data outside the main network - the blockchain. However, that proposal was controversial with bitcoin miners.

As a compromise, SegWit2x was developed, which implements SegWit while doubling the block size limit.

The question remains whether the implementation will lead to a split in the cryptocurrency.

SegWit2x software will be released by 21 July, followed by a separate change known as a user-activated soft fork (UASF) on 1 August. If a majority do not deploy the SegWit2x software by then, two versions of bitcoin's blockchain could emerge.

Read more: Initial Coin Offerings: Are they a solution to Bitcoin woes?