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Bitcoin cash briefly replaced rival digital coin ether as the second-largest cryptocurrency

  • The market capitalization of bitcoin cash briefly surpassed that of ethereum on Sunday
  • Bitcoin cash rallied after plans for a "hard fork" in the original bitcoin blockchain were called off

A cryptocurrency that split away from bitcoin was temporarily the second-largest virtual currency by market value on Sunday.

The market capitalization of bitcoin cash surged to more than $41 billion on Sunday at 2:29 a.m. ET, according to data by industry website Coinmarketcap. It dipped to $22 billion at 10:30 p.m. ET.

Bitcoin cash usurped rival digital coin ether — the digital token of the ethereum blockchain — becoming the second-largest digital currency by market cap for a number of hours.

Vitalik Buterin, co-founder of Ethereum, congratulated backers of the bitcoin offshoot on Twitter.

In response to a Twitter user that questioned the dominance of bitcoin, Buterin said: "A key reason why I am now so confident in crypto is precisely the fact that there are so many different teams trying different approaches."

Bitcoin hard fork shelved

Bitcoin cash's price rallied after plans for a so-called "hard fork" in the original blockchain were scrapped by developers. The digital currency reached a record high of $2,577.11 Sunday at 1:49 a.m. ET.

A number of people within the bitcoin community had hoped for an upgrade to the blockchain known as SegWit2x to speed up transactions. The upgrade would have likely resulted in another split in the blockchain. It was planned to go ahead this month but was shelved due to waning support.

Blockchain is the technology that underpins cryptocurrencies like bitcoin. It records all transactions of the digital currency on a dispersed network instead of one centralized server.

Two previous hard forks have resulted in the creation of new cryptocurrencies, bitcoin cash being one of them. Once the blockchain is forked, investors in bitcoin receive one new digital coin for every bitcoin they own.

Bitcoin gold was formed as a result of another split last month. According to Coinmarketcap, bitcoin gold futures were trading at $273.54 at 10:30 p.m ET, down more than 36 percent for the session. The bitcoin gold blockchain was officially launched Sunday, developers backing it said in a blog post.

The price of bitcoin slumped to $5,507 Sunday, the lowest it has been since the start of the month. Bitcoin topped $7,879 for the first time less than a week ago.