Bitcoin, the world’s most famous digital currency, split in two on Tuesday. So now there are two versions: The original one and a new type of online money called Bitcoin Cash, which is now being bought and sold at online exchanges.
The new currency was trading at about $215 on Tuesday, and, in what might come as a surprise, its arrival has not undercut the value of the original version. As of mid-afternoon, the price of bitcoin proper was around $2,750—not far below its all-time high of just above $3,000.
Here is a screenshot from the website CoinMarketCap, which shows the price of Bitcoin Cash over the last 24 hours:
As you can see, there was an initial spike when the new currency hit the market this afternoon, followed by a series of dips. The earlier prices were based on a tiny sample of trades so the more recent ones, between $200 and $300, may be a better indication of its underlying value—though given the enormous volatility in digital currency markets, tomorrow may be a different story.
The above chat also shows, on the right hand side, the value of Bitcoin Cash in relation to bitcoin. So far, the trades indicate the new currency is worth about 7% to 10% of the old one.
If Bitcoin Cash continues to trade at any significant value, it could create enormous pressure for the likes of Coinbase, which is the most popular digital currency exchange, to distribute the new currency to its customers.
As it stands, Coinbase is standing by its controversial decision of last week not to support Bitcoin Cash. This means many bitcoin owners using Coinbase, all of are entitled to receive Bitcoin Cash at a one-to-one ratio, are seeing their new “Cash” sit in a sort of limbo.
One reason for this is Coinbase and others dislike the idea of Bitcoin Cash because it relies on a so-called “fork” of the software which runs the bitcoin blockchain, and on which all transactions are recorded.
The creation of multiple forks could undermine the network effects that help support the popularity of bitcoin. A source close to Coinbase, who asked to speak anonymously, also told Coins2Day that a new currency like Bitcoin Cash is akin to a new product, and it can be time-consuming and expensive to create secure infrastructure to trade it.
The Bitcoin Cash fork came about after a group of miners, who are responsible for recording bitcoin transaction records, decided to implement a new version of the software that governs the bitcoin blockchain.
