Bitcoin Cash to launch today amid predictions of ‘chaos’
Bitcoin will likely split into two separate currencies today due to Bitcoin Cash – a new version of the cryptocurrency due to be launched at 12:20 UTC (13:20 BST).
The split is the result of a disagreement over how best to increase network capacity. A software upgrade, known as Segwit2x, has been approved by the Bitcoin community.
Segwit2x attempts to address the network’s limitations in processing millions of daily transactions – the network has not kept pace with the growth of Bitcoin, as it is unable to process transfers fast enough.
At present, the ledger of past transactions, known as the blockchain, can have only 1MB of data added to it every 10 minutes.
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The limitation was originally introduced to protect Bitcoin from cyber-attacks, but has meant some users have had to wait days for their transactions to complete at busy times.
However, not all of Bitcoin’s players are happy with the proposed software upgrade.
Former Facebook engineer Amaury Sechet has spearheaded the opposing faction, which believes that Segwit2x doesn’t go far enough in scaling Bitcoin’s capacity.
Today that faction will launch a fork, known as Bitcoin Cash, taking some of Bitcoin’s processing power with them.
They plan to offer existing investors a matching amount of the new virtual asset, which could put pressure on the value of original bitcoins.
“Nobody can be sure how this is going to play out over the short term,” commented Iqbal Gandham, UK managing director of the eToro trading platform.
Bitcoin Cash will have a block size of 8MB – far larger than the 2MB that Bitcoin will increase to in November under the Segwit2x initiative.
Some Bitcoin exchanges are divided about whether to support the creation of Bitcoin Cash and allow its trade, with some exchanges planning to suspect or restrict all Bitcoin trade until any disruption has passed.
“My sense is that the split can be managed if exchanges and wallets take the necessary precautions,” explained Dr Garrick Hileman, Research Fellow at the Cambridge Centre for Alternative Finance.
“But I suspect some will not be well prepared as this happened quickly and a lot of organisations are coming on board at the last minute.
“It wouldn't surprise me if there is some chaos.”
Start-ups receive $60 billion investment, smash 2020 record
Start-ups on the continent have raised a massive 43.8 billion euros ($60.9 billion) in just the first six months of 2021, according to figures from Dealroom, surpassing the record 38.5 billion euros invested last year..
This is despite the fact that the number of venture deals signed so far is around half the amount agreed in 2020. Only about 2,700 funding rounds have been raised so far this year, compared to 5,200 last year.
Prime examples in times of change
Examples are Swedish buy-now-pay-later firm Klarna which has raised more than $1.6 billion in two financing rounds, the German stock trading app Trade Republic received $900 million in May and British payments provider Checkout.com snapped up $450 million at the start of the year.
The figures suggest that European tech firms are pulling in far larger sums of money per investment than in previous years, which defies the economic uncertainty of the pandemic and boosted online services enormously.
The CEO of Checkout.com, Guillaume Pousaz, said start-ups have often been created in times of crisis, citing the emergence of several new financial technology companies in the wake of the 2008 global financial crisis.
He added that big transformational change was often the time when there is the emergence of a lot of new start-ups, sometimes when people are losing their jobs for associated reasons.
UK leading the charge
Scale-Up Europe, a group that includes the founders of UiPath and Wise, proposed 21 recommendations to help the region build “the next generation of tech giants.” Among the suggestions are tax credits to corporates for investing in start-ups and regulatory changes that adapt to new innovations.
Sebastian Siemiatkowski, CEO of Klarna, said the U.K. leads Europe when it comes to tech policy, and that there were a number of regulatory issues needing to be addressed before the European Union can produce tech giants of its own.
Siemiatkowski highlighted EU regulation of web cookies as an example of “poor regulation.” Yet, as the number of $1 billion start-ups in Europe continues to grow, the number of exits in the continent is also increasing.
This year has already seen some notable acquisitions, including Etsy’s $1.6 billion purchase of U.K. fashion resale app Depop and JPMorgan’s takeover of London robo-advisor Nutmeg.
As for stock market listings, a number of notable debuts have taken place in London in particular, including food delivery app Deliveroo, cybersecurity firm Darktrace and reviews site Trustpilot. Money transfer giant Wise, formerly known as TransferWise, plans to go public in the U.K. capital soon.