Hard Fork Split is Avoided! Bitcoin Price Surges

August 1, 2017 has been a date that has been looming large for Bitcoin enthusiasts. That is the date that the dreaded hard fork was slated to occur: the fork would occur as a result of the adoption of new protocols to determine how the cryptocurrency would be scaled in order to accommodate the rapid growth in users and transactions. In the period leading up to the hard fork, investors and exchanges alike shied away from the cryptocurrency, selling off stakes and even preparing to close down transactions in an effort to avoid a messy situation caused by the generation of two separate Bitcoins. Now, as Bitcoin's mining community has coalesced around a proposal to increase the total number of transactions which the network can process, it appears that the controversial splitting measure, called Bitcoin Improvement Proposal 148 (BIP 148) can be avoided.

BIP 91 Gains Traction

Fears that BIP 148 would need to be implemented, resulting in a hard fork, have begun to subside in recent days, mostly due to increasing support for BIP 91, an alternate proposal to accommodate the transaction issue which will increase block size. Although the effect of BIP 91 may be detrimental in some ways to the Bitcoin mining community, the miners have nonetheless showed increased interest in the proposal as a means of accomplishing the scaling goals without having to split the digital currency. According to a report by Quartz, the threshold for activating BIP 91 is 80% of all processing power of the Bitcoin network. As mining takes up the large majority of processing power, this means that the proposal's successful adoption depends primarily on the miners. As of this writing, 97% of the processing power is voting in favor of BIP 91, making it exceedingly likely that the proposal will pass.

Bitcoin Price Rallies

In response to assurance that the hard fork will be averted, the price of Bitcoin rallied at the end of the week. The price jumped as much as 28% in just 24 hours on the news, and it hit almost $3000 late in the day on July 20. This puts the cryptocurrency, which has been lagging somewhat in recent weeks, within reach of its previous price record.

However, there is still the possibility that something will go wrong. The miners seem to have suggested support of the new proposal, but enough of them must now utilize the software that implements the proposal, and they only have about two days in which to do this. If they don't maintain a simple majority of the hash rate, BIP 91 would not activate. Also, just because the immediate problem may be taken care of does not necessarily the ongoing "Bitcoin War" is behind us. Tensions between miners and Bitcoin developers could remain even after the implementation of BIP 91.