Bitcoin is sliding a day after a big change was made in its software

FILE PHOTO - A Bitcoin sign is seen in a window in Toronto, May 8, 2014. REUTERS/Mark Blinch/File Photo

Bitcoin is sliding, trading down 3.88% at $3,296 a coin. Wednesday's selling comes a day after the cryptocurrency hit a record high near $3,500 a coin as a big change was made in its software.

On Tuesday, bitcoin's blockchain network began adopting a new software called Segregated Witness, or SegWit.

"SegWit is a clever solution that essentially increases transaction capacity," according to Aaron Lasher, the chief marketing officer of Breadwallet, a bitcoin technology company.

The software was devised years ago as a solution to the cryptocurrency's scaling problem, which divided bitcoin power brokers for years and led to a split on August 1.

Bitcoin has been charging higher even since. After bottoming out at $2,643 on August 1, bitcoin rallied more than 30% before putting in its record high in response to Tuesday's SegWit implementation.

As for where bitcoin can go from here, estimates range from $5,000 to $100,000.

Arthur Hayes, CEO of BitMEX, a bitcoin derivative exchange, thinks SegWit marks an important milestone for bitcoin's future.

"At long last, the solution touted to solve bitcoin's scaling problems, Segwit, is activated," Hayes told Business Insider. "With Segwit implemented, I believe $5,000 Bitcoin is within striking distance," he concluded.

Josh Olszewicz, a bitcoin trader, seemed to agree. He told Business Insider he sees a "small price bump overall, but there will be a $300 pullback before it marches to $5,000."

But, Dennis Porto, a bitcoin investor and Harvard academic, has his sights set on a much bigger number. He noticed that bitcoin's price has doubled about every eight months, seemingly following Moore's Law. He says if that continues, bitcoin will be at $100,000 by February 2021.

Bitcoin is up 248% this year.

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