Value of bitcoin plunges after technology update gets cancelled

The value of the cryptocurrency Bitcoin plunged on Monday after some users opted out because a technology upgrade called SegWit2x was cancelled, Bloomberg reported. The digital currency declined almost 29% to $5,605 from its record high of $7,882 on November 8.

Users who earlier supported the upgrade “are now switching support to bitcoin cash,” Bloomberg quoted Mike Kayamori, who heads bitcoin exchange Quoine, as saying. While SegWit2x would have increased the currency’s block size, detractors say that it would ruin the cryptocurrency’s decentralised nature.

Despite being a risky bet for most investors, the digital currency is insulating Zimbabweans from hyperinflation and financial ruin, Reuters reported. Many people are reportedly using it to run their households. “I have now changed all my reserves to bitcoin because that is the only way I can protect my investment,” said IT professional Arnold Manhizwa, who lives in Harare.

Manhizwa, a 34-year-old father of two, said the cryptocurrency is a safe asset at a time when bank deposits are losing its value. He told Reuters that the $20-worth of bitcoins that he invested for his daughter a few months ago is now worth over $200. “If I put that money in a bank right now in Zimbabwe I will be left with nothing,” he said.

The Zimbabwean government adopted the US dollar in 2009 after its economy was crippled by hyperinflation, which rendered the Zimbabwean dollar worthless and wiped out people’s savings. However, now the people are facing an acute shortage of dollar cash after a period of relative stability.