Many are already aware, but on the 1st of August, Bitcoin will be going through a hard fork to create a new coin, known as Bitcoin Cash.
The reasons behind the creation of this new coin are many, but essentially, it is due to a fundamental difference in philosophies between two large groups.
One group believes that it is important to preserve the economic principles on which Bitcoin was founded, while also scaling it directly to support potentially billions of users.
The other group believes that it is dangerous to scale Bitcoin directly, as it creates a risk of centralization, so they have focused their work around scaling through secondary layers built on top of Bitcoin.
A compromise (Segwit2x) was created that will allow both forms of scaling to occur without creating a chain split. The proposal includes activating the Segregated Witness proposal created by the Bitcoin Core developers in August, and also directly scaling Bitcoin to double the capacity in November. The two proposals combined have the potential to provide an 800% increase in capacity, and make both first and second layer scaling a lot simpler in the future.
But the developers behind the most deployed Bitcoin node software (Bitcoin Core) are firmly opposed to any form of direct scaling. They have rejected the Segwit2x compromise and have no intention to update their own code to support the November on-chain scaling upgrade.
There are also a substantial number of users who are firmly opposed to Segregated Witness, as it adds a significant amount of complexity to the Bitcoin protocol and, it has been argued, reduces the overall security of transactions being processed on the network.
This second group has decided to create a fork of Bitcoin on August 1st, which will be called Bitcoin Cash. It has already gained promises of support by a number of wallets and exchanges.
PTYcoin supports, and will continue to support Bitcoin (BTC), and has stated support for the Segwit2x compromise. We will be adding support for Bitcoin Cash (BCH) in the very near future, as the exchanges we work with add support as well.
There is a possibility of a further fork in November caused by the refusal of the Bitcoin Core developers to support the 2x direct increase in capacity. If that fork occurs, we will evaluate the situation and determine our support for the resulting new coin at that time.
During the August 1 fork, most exchanges will be suspending BTC deposits and withdraws for 24 hours. We will be doing the same. We will resume trading BTC on August 2, and we will begin trading BCC in the near future.
By Jim Phillips. Founder of PTYcoin, S.A. He has been a pioneer in Panama in the creation of platforms for Cryptocurrencies and international advisor of several business models that have implemented Bitcoin.