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The Vector

NJIT's Student Newspaper

The Vector

NJIT's Student Newspaper

The Vector

Bitcoin Fork Canceled and Bitcoin’s Possibility as an Investment Tool


Fall has been an interesting time for bitcoin.

We have seen price action from $3,500 in September to $7,600 this month. This might be attributed to what was Bitcoin’s hard fork, Segwit2x. However as of November 8, the Segwit2x fork has been canceled by the community behind it. The community, in this case, refers to the miners sustaining the transfer network and the developers behind the coin.

One may wonder, what is a fork and what does it mean for Bitcoin and the Average Joe trying to use Bitcoin as an investment tool?

Forks refer to a change in code programming and implementation of the core system behind a cryptocurrency. There are two kinds of forks, soft and hard forks. In a soft fork, the community decides that there is need for change in the code programming, leading to implemented change. The old version is no longer kept up by the network and the network is copied while the old network is fully lost.

In a hard fork, only part of the community comes to a consensus to implement change while the other part of the community remains unmoved. The network is copied and a new code is implemented, however, the old network is kept intact and in use, hence creating two similar coins.

With Bitcoin’s August hard fork, Bitcoin Cash, there was a disagreement in the direction for the future of Bitcoin. This hard fork successfully occurred, and Bitcoin Cash was implemented and accepted. This was not the case for the latest proposed fork, Bitcoin Gold. Bitcoin Gold occurred mid-October and was not met with the same openness.

The Bitcoin Gold fork received opposition and little support from the community, and was left to be a lesser cryptocurrency. Without proper support and with various issues with the security of the code, Bitcoin Gold had little success.

Again, a new version of Bitcoin, Bitcoin Segwit2x, was scheduled to be implemented but was dropped on November 8. The core developer team behind the fork was met with much backlash and therefore chose not to continue.

The choice of the community to not go through with a hard fork implies a want for stability. Forks add volatility to the market, allowing for price surges and steep falls. Because of the possible Segwit2x fork that was going to happen, we saw the price move to all new heights. This price would most likely have dropped just as it rose if we look at the price change that occurred around the Bitcoin Gold fork. The pushback could mean a more reliable Bitcoin price and this in turn means a greater opportunity for investment. Investors like less volatility and you should too.

As a monetary system and as a community, Bitcoin has proven by this pushback to provide an outlet for investment. All investment involves risk, but not all investments can provide the benefits that cryptocurrencies like Bitcoin can. Decentralization, the returning of power back to the average person, is something that you should be aware of.

A Forbes contributor from earlier this year points out that the amount of debt incurred by an average college student in the class of 2016 is about $37,000. The average college student has little capital to invest with, meanwhile most possibly have none. It is important to note that investing is an opportunity to obtain financial stability. Financial stability although, may be an idea most college students fail to regard; some may be willing to invest time to use traditional methods.

Bitcoin is the answer. Bitcoin can provide a tax free, self-controlled, method for investment that is ideal for the average student. Currently with the possibility for large growth, Bitcoin can be the new investment outlet for the average Joe and college student alike.

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