Bitcoin traded slightly lower Tuesday as digital currency miners completed a split of the digital currency and worked to create more of the new, split-off coin called bitcoin cash.
“A Bitcoin block was just mined that’s invalid for Bitcoin Cash nodes! [That] means the chain has now forked. Bitcoin Cash is one block behind,” Bitcoin Magazine said on its liveblog at 9:24 a.m., ET. Ethereum creator Vitalik Buterin co-founded the magazine in 2012.
Bitcoin data website btcforkmonitor.info also confirmed the split.
Futures for the new “bitcoin cash,” an alternative version promoted by a minority of developers, gave back all of an initial 48 percent jump to $422 to drop about 26 percent and trade near $214 as of 4:55 p.m., ET, according to CoinMarketCap.
Trading in bitcoin cash was available on some exchanges, but remained a fraction of bitcoin’s price.
Kraken Exchange, which has about 10 percent of U.S.-dollar bitcoin trade volume, showed on its website that trades for bitcoin cash were pricing the new coin around $197.
“Bitcoin Cash will have to prove itself over time and gain trust from users,” Amaury Sechet, lead developer behind bitcoin cash, told CNBC. “The current price may [seem] low but this is actually an amazing level of support.”
Bitcoin cash futures 1-day performance
Within six hours of the split, digital currency mining and trading firm ViaBTC — one of the few supporters of bitcoin cash — showed on its website that miners had completed three blocks for the new digital coin. The block is part of the blockchain technology on which digital currencies like bitcoin are based, and the initial lag in block completion had worried some digital currency enthusiasts.
“The fact the block is taking so long is making people reevaluate,” said Stefan Thomas, chief technology officer for financial technology firm Ripple, which has its own digital currency.
Thomas noted miners could give up on trying to mine bitcoin cash, halting its development. However, the bigger question for him was “whether bitcoin has solved its long-term governance issue or kicked the can down the road.”
Tuesday’s bitcoin split was planned by a few who disagreed with a more popular upgrade proposal called SegWit2x, which is set to fully implement this fall.
Bitcoin traded 4 percent lower near $2,754 after dropping to a low of $2,670 earlier in the morning, according to CoinDesk. The digital currency rose more than 10 percent in July and has more than doubled in value this year.
Ethereum gained nearly 12 percent to trade near $229, according to CoinDesk.
Bitcoin 1-day performance
Digital currency “miners” could officially begin coding the new bitcoin cash blockchain after 8:20 a.m., ET Tuesday. Analysts had estimated the split into bitcoin and “bitcoin cash” would occur by around 10 a.m.
Direct holders of bitcoin should have received both versions of the currency after the split.
However, Coinbase said it will not support the new bitcoin cash. The firm operates the GDAX exchange, which said in the afternoon that bitcoin deposits and withdrawals were available again after a temporary suspension in anticipation of the split.
Bitfinex, which has nearly a third of U.S.-dollar bitcoin trade volume, tweeted mid-Tuesday morning that it re-enabled bitcoin deposits and withdrawals. The exchange earlier suspended bitcoin deposits ahead of the split.
Bitfinex said in a separate blog post Tuesday that it will decide whether to list bitcoin cash “based on how the situation evolves.”