Are Your Bitcoin Safe After The Bitcoin Hard Fork? - The Bitcoin Hard Fork Explained As Simple As Possible
Bitcoin prices (and cryptocurrencies prices in general) have been dropping like a stone as people take their all time high profits off the table. There's nothing wrong with taking profits when the price is high.
Some people panic when the price of Bitcoin drops and with the new hard fork approaching are cashing out before it drops further.
With all this selling the price is on sale right now. Good time to buy if you're plan is to hold for the long term.
If you're like me and plan on holding Bitcoin through the upcoming hard fork, there's a few things you should know to keep your funds safe throughout the transition.
What If Bitcoin Splits Into Two Coins?
First off, there is a possibility that Bitcoin could split into two different coins after the hard fork if the miners don't come to a consensus before the fork.
There are two different ideas of how Bitcoin should proceed with 85% of the miners wanting to implement SegWit2x (same bitcoin or BTC) and 42% of miners wanting to implement Bitcoin Unlimited (the new coin BU).
If this split into two coins does occur here is what you need to know. The split would create two different Bitcoin networks and two different coins. You would be holding two different assets.
Soon after this hypothetical split happens the market will determine the value of each coin and you will be able to spend the total amount of coins you have on each network.
You can spend these coins on both networks as long as you personally hold and control your private keys to your coins.
If you're keeping your bitcoin on an exchange where you do not have 100% control of your private keys then you risk the possibility of having access to only one or the other coin should a split occur.
Depending on the choice the exchange holding your coins makes, you may only have those coins available to you. If the holder of your coins decides to allow coin access to both networks then you may still be able to access both networks and their respective coins.
However, if you are the holder of your coins and your private keys, then when the dust settles you will be able to access and spend both coins on two different networks.
If you're not 100% sure if you are the holder of your private keys you can store your bitcoins on a paper wallet until after the hard fork happens and the market decides which coin will prevail if the split takes place.
A great post about paper wallets can by found at How To Import Paper Wallets And Beginners Guide To Wallets --- by @heiditravels
What If Bitcoin Does Not Splits Into Two Coins?
If the split never happens then none of this matters. Bitcoin prices will take a dip and in my view will rise again after the hard fork.
It is a good idea to not do any transactions on or around the date of the hard fork which is August 1st, 2017.
If you're a long term holder of bitcoin then buying when the price is lower is a good idea. These are just my thoughts and I'm not giving financial advise. I'm just sharing what I have learned and believe to be true. Plus, just for your information I have been drinking beer while writing this post so take everything I'm saying with a grain of salt. (or a sip of beer)
Disclaimer: The investment in Bitcoin can lead to loss of money over short or even long periods. The investors in Bitcoin should expect prices to have large range fluctuations. The information published here cannot guarantee that the investors in Bitcoin would not lose money.
Here is a video that explains the hard fork in more detail and how to keep your bitcoins safe.
Definitely holding onto my BTC (on paper wallets) through the hard fork. In it for the long haul...
Me too. I believe in the long term potential of Bitcoin
Scaling in the future has the potential to be absolutely MASSIVE 😳😁
Agreed. Bitcoin sure is seeing more adoption by people and governments even. It's exciting to see where all this will lead. We're just getting started really.
Yip,!its definitely still early days. Exciting times ahead 😁
There is no contradiction between holding long-term and sell right now.
What do you mean by no contradiction?
Thanks for taking the time to explain it. I'm completely new to cryptocurrency but trying to learn all that I can, so all this panicking about the markets is a bit beyond me right now, this info really helped. Thanks again!
Thanks for taking time to read my post.
good info, thanks for posting this so i can learn a bit more about what's coming
I look at it like growing pains. We'll get through it and be stronger afterward.
Thanks for taking the time to explain this. I have read a few articles and watched a few videos but it is nice to have many different sources to figure out if my understanding is correct.
There's a lot of different views on where it will go. We'll see.
I didn't see this before... so belated thank you very much!
I'm just holding. Not technical enough to play around. Thanks.
Great article, thanks for the good work!
Read this
During BTC crashes, ChainCoin goes up... Of course BTC are safe, but I made some savage cash by moving my btc to ChainCoin during this crashes. I have following this HODL revolution and my question is... Will CHC dethrone BTC?
I don't know anything about ChainCoin.
I don't own any bitcoin and I imagine I'll mostly end up eventually using it to convert steem to fiat, but I'm really fascinated by this hard fork. It seems like a huge landmark that the first cryptocurrency ever made might split like that.
Question.. Is Coinbase considered a safe wallet during the hard fork or should I move BTC to Jaxx or Mycellium or paper wallet?
Coinbase is looking out for their customers and will probably favor the majority chain which will probably be segwit2x. Question is if bitcoin forks and splits like Ethereum and Ethereum classic did, will coinbase give customers both coins?
That is exactly the right question. By having full control of your own keys and not storing bitcoin on an exchange then this question becomes irrelevant because you can transfer either coin and any network at any time. You decide if you want to sell one coin or the other, when and where to do so, or to hold them both.
Very good