Dealing with the Bitcoin Forks

Dealing with the Bitcoin Forks

By | 2017-12-19T22:09:00+00:00 October 18th, 2017|Tags: , , , , , |

Background Information

The Bitcoin network is planning to undergo to forks at this point in time, one of the forks is called Bitcoin Gold which is due to take place on October 25th but will most likely go live early November and the other one is called Segwit2x which may take place around November or BH (Block height) 494784. So this begs the question, what is the best way to deal with the two upcoming forks? What actions can stakeholders take to prepare themselves for such an eventuality. But first of all, why is the Bitcoin going to most likely experience a fork in the first place?

The Segwit2x project started to speed up the transactions of Bitcoins and place less strain on the networks and servers and would increase the blockchain size to 2MB, which is when the hard fork is expected to take place. The Bitcoin Gold project was started to address what some believe to be an issue with mining claiming it is too centralized. So the Bitcoin Gold project wants to fork the network and enable Graphic Processing Units to be able to mine it.

How can one Prepare Themselves?

  • Ensure all your Bitcoins are in your own personal keys, ensure you’re in full control of your Bitcoins at all times
  • Don’t keep any coins on centralized exchanges or wallets owned by a third party as than you are not in full control of your Bitcoins, the owners of the exchanges are
  • Do not trade or send Bitcoins during this period
  • Best thing to do is to keep Bitcoins in hardware wallets
  • Once the fork is over, investigate to see ensure your Bitcoins are safe

Concerns & Rejecting the Forks by Stakeholders

One of the biggest concerns stakeholders have against these forks is that neither Bitcoin Gold or Segwit2x offer Replay Protection which could leave the coins vulnerable to attacks, manipulation and mistakes. Which has put many Bitcoin stakeholders such as Bitmex from adopting the fork and new coins. Samourai Wallet also accused Segwit2x of attempting to sieze control of the Bitcoin and stated changes made by the recent forks were unnecessary unsafe.

Do forks have an impact on the Bitcoin?

This is not the first time a major fork has occurred and although forks generally do impact the Bitcoin short term, the fact remains that the Bitcoin will always only have a 21 million coin limit. Bitcoin Gold, Bitcoin cash or Segwit2x are by most investors seen as alternative coins and are often shelved after initial hypes by investors to make a quick buck. Such statements are evident as Bitcoin Gold, Bitcoin cash and Segwit2x cannot be spent on the Bitcoin network. The bottom line is they aren’t Bitcoin and will never be Bitcoins.