BITCOIN BREAKS RECORD $ 3,500 to reach record now 264% this year

Bitcoin broke the $ 3,500 mark for the first time Tuesday to a new record as uncertainty over the future cryptocurrence fell.

The digital currency hit a record high of $ 3,525.04, before falling to around $ 3,481 on Tuesday.

Bitcoin's record mark marks an increase of 264 percent in the year to date and comes after months of internal struggles in the crypto-current world.

Within the Bitcoin community, there has been a so-called "scale debate". There is a large accumulation of transactions in the Bitcoin chain - the technology that underpins cryptography.

The discussion focused on how to increase the capacity of the block chain to speed up the capacity of the bitcoin network. There were major internal struggles within the community, resulting in two separate proposals on how to expand the blockade chain.

Due to the two separate proposals, there was a "fork" that divided the block chain at the end of July. A new digital currency called Bitcoin Cash was created. The market limit of Bitcoin Cash is barely one tenth of bitcoin.

Most of the community supported a software update called BIP 91, which would introduce something known as SegWit2X to the lock chain. SegWit is the abbreviation for "segregated witness", which would move some of the data out of the main Bitcoin network to increase its capacity. This was received negatively by some miners, as it would lead to fewer quotas for them.

However, miners have accepted the BIP 91 proposal which would increase the size of the block and the SegWit is ready to be implemented today.

"Segwit is active this afternoon and there is not much hope that the network will uncover with lower transaction rates becoming the new normal," Charles Hayter, CEO of London-based digital currency data firm CryptoCompare, told CNBC by email.

"SegWit activation opens projects that bring a certain capacity to the Bitcoin network. Instead of Bitcoin being restrained by internal struggles, it is now the blue sky of opportunity in what can be built."

Once the SegWit is closed on Tuesday, there will be a two-week grace period to allow miners to upgrade their software. But the feeling is that the worst of the fight is over.

At the same time, more regulators continue to make positive noises around the digital currency. In Switzerland, for example, the financial market regulator gave Zurich-based bank Falcon Private Bank the green light to manage block-based technology assets locked behind bitcoin and other digital currencies.

All of these factors may raise the price of Bitcoin higher this year, according to experts.

"Given the advancement of technology to scalability, more institutional investors are considering allocating funds to bitcoin, which can be exciting for the market," he said Aurelien Menant, CEO of Gatecoin told CNBC email on Tuesday.

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