Bitcoin lower as virtual currency splits in two in ‘hard fork’

FILE PHOTO - A Bitcoin (virtual currency) coin is seen in an illustration picture taken at La Maison du Bitcoin in Paris, France, June 23, 2017. REUTERS/Benoit Tessier/Illustration

Bitcoin prices were lower on Tuesday as the blockchain supporting the cryptocurrency split into two in an event known as a ‘hard fork,’ creating two competing strands of the virtual currency.

On the U.S.-based Bitfinex exchange, Bitcoin fell to $2,747.9, down $136.8 or 4.75%.

Bitcoin cash, a new version of Bitcoin, launched at 08.20 ET on Tuesday, creating a new cryptocurrency.

A recent surge in the popularity of Bitcoin, which saw prices hit a record of $3,000 in June, has meant the underlying technology has struggled to cope with a boom in transaction numbers.

Bitcoin transactions are limited to 1MB every 10 minutes – or seven transactions per second.

Bitcoin avoided a split into two independent currencies last month when its network supported a proposal on upgrading to its software in order to speed up transactions on the Bitcoin network.

But some in the Bitcoin community thought the proposal did not go far enough, leading to the ‘hard fork.’

Holders of Bitcoin before the split will end up with an equal value of Bitcoin and Bitcoin Cash following the fork, but Bitcoin Cash will likely only be worth a fraction of Bitcoin.

Elsewhere in cryptocurrency trading, Ethereum, Bitcoin’s closest rival in terms of market cap, was last up 14.35% or $27.52 to $219.07.

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