Bitcoin shot to just shy of $7,900 (£6,000) after a controversial proposal that could have split the cryptocurrency was called off.
The currency had been scheduled to undergo a so-called “hard fork”, a change to bitcoin’s code that would have created an offshoot cryptocurrency, and which developers argued was necessary to keep up with the pace of its growth.
Despite widespread agreement over the summer that the upgrade, known as SegWit2x, would be implemented on November 16, support for the change had waned.
On Wednesday, proposals to implement the changes were suspended over fears they could divide bitcoin irreparably and damage the cryptocurrency’s growth. Bitcoin’s price briefly surged to a new high of $7,848, compared to less than $1,000 at the start of the year. It has since fallen back to trade at around $7,250.
What has happened?
Members of leading bitcoin exchanges supporting the “SegWit2x” proposals have signed a letter calling off the upgrade. SegWit2x would have doubled the size of the bitcoin “blocks” on the blockchain, the record of bitcoin transactions, essentially making it easier to process more trades as more people join and trade bitcoin.
“Although we strongly believe in the need for a larger blocksize, there is something we believe is even more important: keeping the community together,” said Mike Belshe, chief executive of bitgo.com.