Tuesday, October 24, 2017

Dividends or cryptocurrency inflation? Bitcoin sells off as sector prepares for hard fork and third coin in Bitcoin gold

Months ago, a hard fork in the Bitcoin engine led to what some deemed as a 'dividend' to the most recognized and traded cryptocurrency in the markets.  And from that split came a fully tradable token known as Bitcoin cash.

And as the cryptocurrency prepares once again for a controversial hard fork in November, a second 'dividend' being called Bitcoin Gold is expected to come from this transformation.  Yet with this transformation comes a number of questions, and least of which are whether Bitcoin Cash and Bitcoin Gold are simply dividends, or a backdoor way to expand the original Bitcoin cryptocurrency by introducing a subtle form of inflation?

Whatever the perspective, it appears that some are not buying into the new hard fork as Bitcoin experienced a selloff on Oct. 24 of over 5%.

Less than three months after the blockchain "hard forked" and Bitcoin split into legacy Bitcoin and Bitcoin Cash, here comes Bitcoin Gold. As of block 491,407 on the bitcoin blockchain, another alternative version of the protocol of the cryptocurrency has been formed after some developers split the blockchain. And in just one month, yet another fork is imminent. 
After the split, bitcoin owners stand to receive one bitcoin gold for each bitcoin, assuming their wallets or exchanges support the new creation, although some such as the most popular US-based exchange CoinBase have refused to support the fork for the time being as there are "concerns about its security and stability." The project, which seeks to improve bitcoin's technology by changing how its competition for rewards is conducted, is the second to launch since August via an increasingly common process called a "hard fork." Readers may recall the term from the launch of bitcoin cash, the alternative version of the bitcoin protocol that spurred global headlines for unexpectedly creating billions of dollars in value, seemingly out of thin air. 
Bitcoin dropped over 4% to $5,652 on Tuesday morning, paring a decline of as much as 5.9 percent, after the Bitcoin Gold "snapshot" took place on block 491,407 as of late Monday evening, at which point bitcoin holders sold when the cryptocurrency effective went ex-dividend, which also helped push both Ethereum, Litecoin and other altcoins which had been sold as traders rushed into bitcoin to pick up the free Bitcoin Gold, sharply higher. - Zerohedge


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