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Bitcoin soars to record high value

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BitcoinImage copyright Getty Images
Image caption Bitcoin had never been worth above $3,000 (£2,300) per token until the weekend

Bitcoin’s value has jumped to a record high, following a month of turmoil.

The virtual currency reached $3,398.57 (£2,604) per coin in Monday trade, according to the Coindesk Bitcoin Price Index.

It had never crossed the $3,000 mark until the weekend. The market value of all bitcoins in existence has now surpassed $55bn (£42bn).

The surge followed the creation of a spin-off crypto-currency, Bitcoin Cash, last week.

The new asset is trading well below the peak price of $727.54 (£557) per coin it attained on 2 August.

However, Bitcoin Cash’s future does appear to be more assured after Coinbase, one of the leading exchange and wallet services, promised to support it after previously refusing to give such a commitment.

“We are planning to have support for Bitcoin Cash by 1 January 2018, assuming no additional risks emerge during that time,” it announced on its blog.

Bitcoin fork

The value of the original Bitcoin experienced big swings in July. First there was concern that there might be a “civil war” over rival plans to speed up transactions.

That helped cause its value to dip to $1,938.94 (£1,485) on 16 July before a compromise scheme called Segwit2x gained favour.

Then a fresh plan to fork the currency emerged from a group of insiders unhappy with the Segwit2x initiative.

On 1 August, they offered investors a Bitcoin Cash token to match every original Bitcoin token they owned. The move created an incompatible version of the blockchain ledger, which keeps track of past transactions.

The initiative had the potential to undermine the original Bitcoin, particularly if many miners had jumped ship. Miners provide the computer processing power to authorise transactions, and Bitcoin Cash was designed to appeal to their interests.

However, it currently remains more profitable to mine the original Bitcoin’s blockchain than that of Bitcoin Cash, and support for the new crypto-currency remains limited.

“What this has shown is that Bitcoin is much more resilient to forks than some people thought,” commented Michael Parsons, a blockchain adviser.

“And it appears that there is room for more than one type of Bitcoin to exist.”

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