Bitcoin cash launch: the D-Day of digital currency?

On August 1, 2017, the preeminent cryptocurrency is set to break in two: at 12:20 UTC a new cryptocurrency called Bitcoin Cash will be launched. It's based upon Bitmain’s UAHF proposal which was initially created as a contingency plan to thwart the efforts of the UASF, which now looks likely to activate without incident.

The split, called a hard fork, will result in two separate and distinct cryptocurrencies: Bitcoin Cash and Bitcoin Core. It also has the potential to create billions of dollars worth of new cryptocurrency out of thin air.  

"Demand for Bitcoin has been so high in recent months, that those creating the cryptocurrency can't keep up, slowing transactions," Iqbal Gandham, U.K. Managing Director at eToro, said in a press statement on Monday.

"For bitcoin to continue to scale and have the potential to become a globally used currency, this slowdown in transactions has to be addressed."

Bitcoin as it currently stands is in trouble, and with so much money on the line opposing parties have naturally come forward with plans to save it. And, surprise, they all don't agree on the solution. 

Fundamentally, at issue is something called block size. The Bitcoin of today has a limit of 1MB of data per block on the blockchain, and back when BTC was first created this was more than enough to process every transaction in a timely manner. 

Bitcoin exchanges are divided on whether or not to support Bitcoin Cash. Several exchanges, such as BitMEX, Bitstamp and Coinbase, have said they will not support or allow trading of Bitcoin Cash on their exchanges, which means investors holding bitcoins on these sites will not receive any new tokens.

Some exchanges are also suspending bitcoin trading, withdrawal and deposits around the time of the fork. Hayter advises bitcoin investors to check for any statements issued by their exchange to find out whether or not they will receive the new token.

No one really knows what's going to happen on August 1. The hard fork could go smoothly, or both Bitcoin Core and Bitcoin Cash prices could plummet as exchanges struggle to keep up with panicked traders. The crew behind Bitcoin Cash could decide at the last minute to abandon its plan.