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Bitcoin Breaks Lower Than $1,000 on Growing Rift Between Developers

March 24, 2017 at 23:27 by Yahia Barakah

The price of Bitcoin moved lower than $1,000 on Friday as the virtual currency continued to face a number of headwinds. The latest came from a conflict between Bitcoin’s developers that threatens the unity of the cryptocurrency and its future.

Developers of the digital currency disagreed on how to scale up the Bitcoin network by increasing the size of its blocks, which are batches of data that carry transactions. The current maximum size of one megabyte per one block of transactions is placing a limit on Bitcoin’s scalability, and so emerged a number of competing proposals for increasing the block size.

Concerns about the future of the virtual currency grew as supporters of a proposal named Bitcoin Unlimited threatened to create a hard fork for Bitcoin. A hard fork would split the cryptocurrency software platform into two versions, which also splits the virtual currency itself, since the newer software would be incompatible with the old one.

Worries of the growing differences weighed on Bitcoin, which has already been facing negative pressures from a ruling in the United States against a Bitcoin exchange traded fund and a crackdown in China. The US Securities and Exchange Commission rejected a proposal by the Winklevoss twins to create the first exchange traded fund that is based on Bitcoin, which disappointed investors of the virtual currency.

Meanwhile, the People’s Bank of China moved to tighten its grip on Bitcoin transactions within the country, which prompted Huobi, one of the largest Chinese Bitcoin exchanges, to announce new restrictions. Customers are now required to provide details about the origin and the destination of their funds. However, Huobi later explained that these restrictions apply only for customers who have been flagged for money laundering risks.

BTC/USD traded at 921.2 as of 22:55 GMT on Friday, the lowest level since January 31, from 1,027.9 at the beginning of the day.

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