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Bitcoin Nearly Hits $8,000 As Developers Back Out Of Another Split

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Bitcoin Nearly Hits $8,000 As Developers Back Out Of Another Split

(Kitco News) - The popular digital currency, bitcoin, came close to the $8,000 level on Wednesday, as markets reacted to the news that another cryptocurrency split might not happen after all.

The bitcoin split was scheduled to take place in mid-November, with developers planning to introduce an upgrade called SegWit2x. But, the idea was temporarily suspended after major developers reversed their support.

In response, bitcoin surged to $7,899.90, reaching a new all-time high during the day. The cryptocurrency later retreated and was last seen trading at $7,387.30.

The plans to cancel were announced in an email on Wednesday, which was written by the lead developer of the team behind SegWit2x, Mike Belshe, chief executive of BitGo.

The main reason for scrapping the update was that it could “divide the community.”

“Our goal has always been a smooth upgrade for Bitcoin,” wrote Belshe. “Unfortunately, it is clear that we have not built sufficient consensus for a clean blocksize upgrade at this time. Continuing on the current path could divide the community and be a setback to Bitcoin's growth. This was never the goal of SegWit2x.”

The email was also signed by some major developers in the bitcoin community, including Xapo CEO Wences Casares, Bitmain co-founder Jihan Wu, BloqInc co-founder Jeff Garzik, Blockchain CEO and co-founder Peter Smith and ShapeShift CEO Erik Voorhees.

SegWit2x was meant to upgrade bitcoin network’s capacity by improving the speed with which it processes millions of daily transactions. But, the change would have impacted bitcoin’s rules and led to a so-called split in the currency.

This would have been bitcoin’s third split, following one in August, which created bitcoin cash and one in October, which created bitcoin gold.

The update received a lot of support when it was first proposed in May. And the plans to proceed could resurface if there is an increase of support in the online community.

When bitcoin splits the owners of the original currency receive the same amount of the offshoot as well.

Analysts commented that the cancellation of the update was a positive move for the digital currency.

“Indefinitely postponing the fork is a healthy move for crypto assets,” Guy Zyskind, CEO and co-founder of Enigma, a crypto-investment platform, told Reuters. “The ability of the bitcoin community to self-correct and avoid a contentious fork inspires confidence and shows how the ecosystem is entering a more mature phase.”

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