When mining bitcoin, users require high-powered computers to work out math problems in order to approve transactions and earn bitcoins. This meant that only a minority could afford to mine the digital currency, which is why Jack Liao, the CEO of LightningASIC, proposed bitcoin gold.

But, the new cryptocurrency — bitcoin gold — did not fare as well, plunging down 66% from $528 to $127 and last trading at $136.87, according to Coinmarketcap.com.

In reaction to Tuesday’s move, bitcoin dropped to $5,374.60 and then recovered back to $5,696.40 on Wednesday.

Bitcoin split once again, creating a new digital currency known as bitcoin gold and causing havoc on the cryptocurrency market.

The purpose of the split was to expand the mining user base by making it easier for people with less powerful computers to mine the cryptocurrency.

All those who owned bitcoins will now receive the same amount of bitcoin gold.

The news shook other cryptocurrencies as well, including ethereum, which was last seen at $295.43, down 0.29% on the day.

The giant price drop was not the only negative thing that came about after the launch of bitcoin gold. The website created for the new digital currency was also heavily hit with distributed denial-of-service (DDoS) attacks, which overloaded the server with requests.

Major cryptocurrency exchanges are yet to include bitcoin gold as one of the tradable options.

The split came after a similar move in July, when bitcoin cash was created. The reaction to bitcoin cash was slightly less pronounced, with the new cryptocurrency first seeing a surge in price to the all-time high of $914.45 and then a slow decline to $333.

Are Splits Good Or Bad?

Prior to the second split, some analysts warned that this was one of their reasons for distrusting bitcoin.

Goldman Sachs noted in an October report that possible network or infrastructure risk, such as splitting, could create uncertainty.

Others said that splits undermine the theory bitcoin is based on. “These forks are very bad for bitcoin. Saturating the market with different versions of bitcoin is confusing to users, and discredits the claim that there are a limited number of bitcoins — since you can always fork it and double the supply,” Sol Lederer, blockchain director at Loomia, told CNBC.

Yet, there are those who believe that splitting is a good thing because it allows people to part ways once there is a disagreement.

“Splits happen periodically in all open-source communities,” Bob Summerwill, chief blockchain developer at Sweetbridge, told Business Insider. “Having everyone collaborating in a single project is ideal, but sometimes there are genuine differences of opinion, and network effects are not enough to keep everybody together, so a group secedes.”

Anna Golubova