With continuing fears about Bitcoin’s split, its price movement continues to remain volatile. During the past week, Bitcoin started to gain strength on the hope that a split would be avoided with more than 80% nodes signaling support for BIP 91. The uptrend weakened after a group of miners, developers, investors, and bitcoin users said they would go ahead with UAHF activation on August 1 and create "Bitcoin Cash." (See also: Ripple Is Emerging as a Stable and Trusted Cryptocurrency)
Bitcoin blocks have a limited ‘storage’ capacity of 1MB under the original model, but with increased usage and transactions, congestion problems were reported. Thus, different groups within the Bitcoin community pitched different solutions to enable smoother running. However, there was a failure to reach a consensus.
Optimism spread with BIP 91 (Bitcoin Improvement Proposal) receiving support from 93.8% of miners. BIP provides a way for a simple majority of miners to coordinate activation of the existing SegWit deployment with less than 95% hashpower. Although the cryptocurrency space hasn't seen much movement in most of July, rising confidence about a potential solution to Bitcoin’s scaling issue took the overall market capitalization past $95 billion. (See also: Cryptocurrency Market Capitalization Rises Again)
With BIP 91 being locked-in, there was a growing sense that the problem was resolved. Then came the announcement about Bitcoin Cash.
The group behind it has said, “On August 1st, 2017, We the People will breathe new life into Bitcoin. A group of miners, developers, investors, and bitcoin users will upgrade the Bitcoin protocol as specified by the User Activated Hard Fork (UAHF). Those who do not want to follow our lead are free to use whichever chain they like. Miners implementing the UAHF will safely split away, creating a new version of Bitcoin called “Bitcoin Cash." All current Bitcoin holders will automatically own Bitcoin Cash. The existing ledger at the time of the split is preserved, thus users retain any balances they had before the split.”
At 8:27 AM ET on Wednesday, Bitcoin was trading at $2564.30. (See also: More Billionaires Are Buying Cryptocurrencies)
4:15am, ET, July 26, 2017