Bitcoin soars to record peak after plan for upgrade which would split the currency is shelved

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A bitcoin (virtual currency) coin placed on US dollar banknotes is seen in this illustration picture. Photo: Reuters

Published: 7:10am, 9 Nov 2017Updated: 7:10am, 9 Nov 2017

Bitcoin hit a record high just shy of US$8,000 on Wednesday after a coalition of developers and investors suspended a software upgrade planned for next week that could have split the digital currency in two.

In an email on Wednesday, the lead developer of the team planning to carry out the upgrade said “Segwit2x” would be scrapped for now as it could “divide the community.” The email by Mike Belshe, chief executive of blockchain security firm BitGo, was also signed by some of the biggest names in the bitcoin world.

SegWit2x is an agreement among high-profile figures in the bitcoin world aimed at upgrading the bitcoin network’s capacity. It received significant support when it was announced in May but many bitcoin developers had withdrawn support for the upgrade over the last few months, analysts said.

A copy of bitcoin standing on PC motherboard. Photo: Reuters

The software upgrade would have attempted to address the bitcoin network’s limitations in processing millions of daily transactions. The network has not kept pace with growth and is unable to process transactions fast enough.

The upgrade would have changed bitcoin’s rules leading to a so-called fork, effectively cloning the existing bitcoin to create another cryptocurrency.