Bitcoin Cash November 15th Hard Fork Explained
On the 15th November 2018, Bitcoin Cash will go through a hard fork (this will occur at the UNIX timestamp 1542300000). Unlike the hard fork back in May 2018, there isn't consensus going into this, where two groups of people have different opinions on what should be changed.
This has led to lots of confusion raising various questions: Will there be two coins after the hard fork? Do I need to do anything before the hard fork? etc.
Below we explain the lead up to this hard fork, and what what will happen during/after it.
Will there be 2 coins after the hard fork?
This is an important question that many news sites don't really clarify, we'll clarify this now.
When Bitcoin Cash (BCH) was first created in August 2017, this was done through a hard fork on Bitcoin (BTC). The new coin, BCH, was created because there wasn't consensus on planned changes to BTC (not everyone agreed). The group with the most hashpower is the one who retained the 'BTC' symbol (as for proof-of-work coins the longer chain is the 'real' chain), and the smaller group created the new coin 'BCH'. This new 'BCH' coin was only created because it was supported by a group of developers, was supported by several exchanges, and had a viable amount of hashpower (if a coin doesn't have enough hashpower it's vulnerable to attacks).
Because this upcoming Bitcoin Cash (BCH) hard fork doesn't have consensus, it will go through the same process as the earlier fork in August 2017. Just after the hard fork we'll have the answer to these questions:
- Which chain will retain the 'BCH' ticker (whichever one has the most hashpower behind it). You can make an educated guess just before the hard fork regards which chain will be the longer one (with the most hashpower), but be aware miners can change their mind if needed. Many miners will simply mine the most profitable one (so if the newly created coin isn't supported on exchanges they might stop mining it). Be aware that even though miners determine which coin continues to be the main chain, users buying/selling each coin are the ones who determine which is most valuable (although historically the coin retaining the existing ticker, BCH in this case, has stayed the most valuable).
- Will the newly created coin (the one with the least hashpower behind it) be supported on exchanges, and if supported what will its ticker symbol be (there are lots of politics here, where hopefully there's consensus over naming the newly created coin). If it turns out this coin doesn't get a lot of hashpower behind it, it might never get a name. Even if the new coin is supported, it might be sold in large quantities on exchanges after the hard fork, pushing its value very low. So be careful trading your BCH for this new coin and vice versa, unless you're familiar with hard forks & crypto trading it may be best to just hold both coins.
Risks around the hard fork
You should be aware of some risks surrounding this hard fork:
- If you hold Bitcoin Cash (BCH) in an exchange/wallet, it's good to double check if your exchange/wallet will be supporting both the new coin & the existing BCH. In some cases the new coin might not be supported, and in rare cases the existing chain might no longer be supported (this is less likely, but due to politics it could theoretically happen if an exchange/wallet wants to push for this new coin and stop their users using the existing BCH).
- Avoid sending money with BCH around the time of the hard fork. Many exchanges/wallets will stop you doing this themselves, but if they don't you should be very careful. The two chains after the fork won't have something called 'replay protection', which means you could lose funds if sending money near the hard fork time (or experience problems using it in general).
- You'll likely see scams start to pop up around this hard fork, be alert for them. To claim your existing BCH and any new coins after the hard fork you don't need to give anyone your private key. Anyone asking for your private key is likely trying to steal your existing BCH. You just need to keep your coins on an exchange/wallet, and if you want the new coins double check this exchange/wallet will support a potential new coin.
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