Bitcoin, the digital currency, has set a new record and is now being valued at more than $4,000 since August 13. The price of the cryptocurrency has been steadily rising this year and is now worth more than four times what it was in the beginning of 2017.
On August 1, the digital currency split into the original bitcoins and a new network called Bitcoin Cash (BCH). The aim of this move was to improve the network capacity and transaction efficiency of the digital currency but the split was expected to lead to a sharp decline in the value of bitcoins.
Contrary to expectations, it did exactly the opposite.
According to CoinDesk’s Bitcoin Price Index, bitcoin was trading at $2,759 before the split happened. However, a week later it was trading at a record-breaking $4,100. By August 15, the price of bitcoins had risen to $4,383.
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It is difficult to pinpoint exactly why the price of bitcoins has increased. According to CoinDesk, “the record-breaking price levels would seem to indicate money coming into the market that had been held back pending the uncertain outcome of a split of the bitcoin network that resulted in a new cryptocurrency called bitcoin cash.”
Experts are also suggesting that the split of the digital currency and the smooth creation of Bitcoin Cash on August 1 may have added value to the currency. As part of the split, every original bitcoin holder automatically received an equal amount of bitcoin cash. So, if bitcoin cash is trading at $200 and bitcoin is trading at $2,000, bitcoin holders have received an additional 10% value due to the software change and with no additional investment.
The original digital currency, Bitcoin, is also evolving by trying to speed up the rate at which transactions can be carried out. It is changing its rules so people would be able to put more transactions on each block of code. The proposed change, called “Segregated Witness” is expected to improve bitcoin’s performance and will be rolled out this week.