Bitcoin traded lower today after the cryptocurrency started to split in two following a long-running rift in its community of developers and miners.
The digital currency was trading 2.76 per cent lower at $2,726.09 at the time of publishing after falling more than five per cent earlier in the day, according to CoinMarketCap.
Meanwhile, futures for bitcoin cash, the new currency, have been volatile. It briefly jumped 48 per cent before falling to trade 13.86 per cent lower at $246.59 at the time of publishing.
The split, or so-called hard fork, came as a breakaway group of bitcoin's miners, who create the cryptocurrency by solving mathematical equations, started using a different software, which created a competing currency: bitcoin cash.
"Demand for bitcoin has been so high in recent months, that those creating the cryptocurrency can’t keep up, slowing transactions. For bitcoin to continue to scale and have the potential to become a globally used currency, this slowdown in transactions has to be addressed," said Iqbal Gandham, UK Managing Director at eToro.
Bitcoin cash will increase the size of transactions that can be processed on the network, but it has had a slow start, Grandham said.
The delay in the bitcoin split could be a result of a lack of miner support for the new cryptocurrency.
It seems as if people over-estimated the mining power, or the support from miners, hence it is taking far longer than most expected.
Mustafa Al-Bassam, security expert at Secure Trading, said:
“On the whole, the fact that there is disagreement and the freedom to offer a breakaway plan is positive. While it is still a highly experimental and volatile system, the market is being allowed to determine which version of bitcoin is more valuable – and this is an important precedent to set."