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What is a Bitcoin fork?

174 points by sds111 9y ago

deleted 9y ago
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Waterluvian 9y ago
That helped but I do not understand the economic compatibility of a fork. How do they not wreak havoc and chaos on that coin's economy? Do I get coins for each of the new coins or do I have to pick? It all feels really risky and that risk feels foisted upon me. Can I cash out before the fork?
- jeremyt 9y ago
  Yes, if you hold during the fork you get coins on both forks. Yes you can cash out before the fork.
- tomglynch 9y ago
  Realistically, the value of the chain pre-fork should equal the value of the two chains post fork. However, this is not always the case - due to people thinking they can get 'free coins' from the other chain (price goes up), people being afraid of a fork (price goes down), etc
  - Empact 9y ago
    When a fork occurs, you do not simply split the assets and community in two, you form 2 better-aligned independent groups pursuing currency success under two different sets of operative rules. Therefore new value is potentially created both in alignment and in the greater chance of one of these currencies hitting upon the set of rules that is ultimately successful in the space. Obviously this has limits - eg when the rules are already being exhaustively explored, there are no takers for the new currency, or developer attention is already the limiting factor.
    - njarboe 9y ago
      Sort of like when a company splits and the two parts are more valuable than the whole. Not common, but I believe Ebay and PayPal were more valuable post split. It idea floated at the time was PayPal growth was being held back by Ebay management.
  - jiggunjer 9y ago
    Conservation of value. The first law of forkodynamics.
- davidw 9y ago
  "The only winning move is not to play" is always great advice.
  - colordrops 9y ago
    Tell that to my 8000% returns.
    - celticninja 9y ago
      More like the only losing move is to not play.
    - 659087 9y ago
      https://en.wikipedia.org/wiki/Survivorship_bias https://en.wikipedia.org/wiki/Survivorship_bias
      - colordrops 9y ago
        Fully aware of that, it was meant in jest.
- cjhanks 9y ago
  I don't either. Fiat currencies don't fork - you can simply exchange one for another. Another close comparison is a traded equity having a 2:1 split, except shareholders technically lose nothing. Another case would be stock dilution - though, I have never heard of a public stock diluting to 50% value... that seems unlikely. If a specific commodity were to suddenly decide it had an unreported surplus on the order of 100% of current market estimates, the consequences on valuation would be pretty significant (maybe not a 2x loss...). I guess the closest comparison to bitcoin is; oil price is at $60 / barrel today and speculators believe there is a 30% chance that they mis-estimated the number of barrels by 100% - but you won't know for sure for another 3 months. What's should the price of oil be tomorrow?
  - jstanley 9y ago
    That's not a close comparison at all. When a cryptocurrency forks, you keep the same amount of coins on both sides but the 2 are wholly incompatible with one another. A closer comparison is that you it's like 2 simultaneous futures, but with different consensus rules.
    - cjhanks 9y ago
      Oil futures exist and option prices are usually tied to speculation of quantity. If the price becomes wholly detached from scarcity; it's not a commodity or a currency, it's just means for speculative gambling.
  - nikcub 9y ago
    > Fiat currencies don't fork There was an interesting situation after the fall of the Soviet Union. Because most of the states didn't have economies strong enough to support their own currency, they remained a unified currency union as part of the CIS The only problem was that each state then started printing the money like mad and then sending it to other states to be sold / traded. Some of the states then introduced what was a quasi two-currency system - to buy local currency or to exchange it, you required both the old Soviet Ruble and a new "permission" note from the state to exchange. In theory this placed a cap on the inflation but the result was almost like a currency fork. A lot of these states ended up establishing their own currencies but still had problems with "swaps" from the old currency - so they were constantly reissuing new notes and new coins that needed to be exchanged - but many of the old notes or permission slips would have value on the black market
- jstanley 9y ago
  You get coins for each of the forks. It's literally a fork in the timeline of the currency, as if you're exploring 2 simultaneous future timelines. You can "cash out" whenever you like, obviously.
- tfha 9y ago
  When a chain splits, your full previous balance exists now on both child chains. The price of each chain's coins is set by supply and demand. Typically people prefer to hold on to both coins after a split. So there's not actually that much sell pressure, meaning both coins can tend to exist together.
- zodiac 9y ago
  A fork is just a protocol upgrade that is non-backward-compatible and where both the old and new protocols have significant amount of validators (in PoW, this means miners) operating with that protocol. Since the protocols are not compatible, they have a different transaction history after the fork. Since they used to be compatible, if you had 1 BTC before the fork, after the fork, all validators still agree that you have 1 BTC, but 1 BTC on one chain is not the same as 1 BTC on the other chain, so it's equivalent to having (say) 1 BTC and 1 BCH. Everything else is just supply and demand, ie what's the market-clearing price for 1 BTC and for 1 BCH and how does it compare to before.
  - arianvanp 9y ago
    Could I trade with that btc on both forks at the same time?
    - brazzy 9y ago
      After the fork you have 1 BTC which you can use only on the BTC chain, and 1 BTH which you can use only on the BTH chain. And these are completely separate.
    - zodiac 9y ago
      Think about it using my definition of fork, the answer should be clear
      - veli_joza 9y ago
        I wouldn't use expression 'protocol upgrade', that implies it's mandatory and that current protocol is rendered obsolete. I think 'fork' better explains the mechanics.
Beejeepa 9y ago
Coinbase is going to only support Bitcoin Cash.
- vinniejames 9y ago
  This is flat out false. They have no plan to even support it at all, let alone default to it
  - acchow 9y ago
    "We are planning to have support for bitcoin cash by January 1, 2018" https://blog.coinbase.com/update-on-bitcoin-cash-8a67a7e8dbdf https://blog.coinbase.com/update-on-bitcoin-cash-8a67a7e8dbd...
    - vinniejames 9y ago
      “assuming no additional risks emerge during that time...We’ll make a determination at a later date about adding trading support” They do not have a plan to add it to the trading platform, which is the only thing that would drive any real value to the Bitcoin Cash market. The only reason they added it at all is to allow people to take their coin and sell it on another exchange, to avoid lawsuits. If they had any plan to add it to add it to the exchange. It would make much more sense to release it at the same time, thereby profiting off of the trading fees
mlamat 9y ago
A bitcoin fork is a political decision on the currency, like the ones central banks make. There are going to be a lot of forks in the future.
- BinaryIdiot 9y ago
  > There are going to be a lot of forks in the future. I tend to agree. The problem, then, is what happens after 3 forks? 4? 10? We're going to keep increasing the number of crypto currencies we own and then we figure to figure out who supports what version of the currency we have to figure out how to cash out... The entire idea of a fork sounds like an absolute nightmare. This is why I'm not putting any serious amount of money in crypto currencies.
  - nikcub 9y ago
    More dangerous than the tech part of the fork IMO is that with any one fork one or more of the bitcoin deposit holding companies can decide at-will that they'll follow a fork as the "new" bitcoin This is an even bigger threat when you consider that they could be incentivized to follow a less valuable fork: exchange your new bitcoin for the old, convert all your users to the new bitcoin - you can now pocket the difference. On the other hand you can also attempt to keep the airdropped funds from forks. Coinbase at first didn't recognize the Bitcoin Cash fork - it was only with pressure that they relented. But there have been other trusted holders who just "ignored" forks
    - acchow 9y ago
      Or you could hold your own bitcoin in your own wallet.
      - nikcub 9y ago
        That's the moral of the story - but a lot of people don't I still haven't convinced my own brother that he needs to move his coins off-market - he said he'll "get around to it at some point" Also have tech friends who keep coins in Coinbase/Coinbase Vault
deleted 9y ago
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alexasmyths 9y ago
This is an interesting paradox because the whole point of the system was that it was decentralized, and once set in motion the rules could not be changed. Or so they can? And who decides? Because these forks can have considerably favourable or negative outcomes for specific stakeholders, it's nary impossible to make the decision 'fairly' and this rather undermines the whole thing, no? And yes, I do understand that 'value' may be the same after such 'forks' but different post-fork mechanisms will imply different outcomes, surely. Would it be possible for nefarious actors to wedge themselves into this process? ... Because we were all looking for the 'technical fault' in the maths/encryption, we possibly missed this aspect of risk?
- JauntyHatAngle 9y ago
  >and once set in motion the rules could not be changed. This was not the case, nor has it ever been. There have been many consensus changes in the past, and bitcoin has had forks that were reverted by the bitcoin community previously. (See the bitcoin 0.8 fork). There have been multiple revisions of bitcoin which would have changed the rules. They haven't yet resulted in a hard fork permanently (except for bitcoin cash) because people have updated before the new consensus rules were activated.
- colordrops 9y ago
  Saying the rules can be changed is like saying that your eyes changed color if you have a child with different color eyes. A fork is not the same chain as the original.
  - alexasmyths 9y ago
    All of the comments above lead me to understand that basically anything can happen with BTC and this kind of undermines it's value as a 'hard currency'. The whole point of decentralization was that nobody could control it, and devaluation was based on some algorithm, limited by tech. If these rules can change, then the intrinsic value of BTC is truly up in the air. What business would invest in using BTC as a currency knowing such things can arbitrarily happen?
rebuilder 9y ago
FYI the segwit2x fork this post was probably mainly motivated by appears to have been called off: https://lists.linuxfoundation.org/pipermail/bitcoin-segwit2x/2017-November/000685.html https://lists.linuxfoundation.org/pipermail/bitcoin-segwit2x...
- tryingagainbro 9y ago
  Until it's on again. Didn't they fork a few months ago too (Bitcoin Cash)?
  - tmlee 9y ago
    Different camps, different forks, pushing different kind of agenda
  - nikcub 9y ago
    Coinbase didn't sign the notice calling off segwit2x[0] even tho they were an NYA signatory - but rather said they were "monitoring"[1] the situation I sense some uncertainty from Coinbase on what they want to do next. edit: also interesting that the price for segwit2x futures has increased today to ~$380 after a low of $198[2] [0] https://lists.linuxfoundation.org/pipermail/bitcoin-segwit2x/2017-November/000685.html https://lists.linuxfoundation.org/pipermail/bitcoin-segwit2x... [1] https://twitter.com/coinbase/status/928476503062462464 https://twitter.com/coinbase/status/928476503062462464 [2] https://coinmarketcap.com/currencies/segwit2x/ https://coinmarketcap.com/currencies/segwit2x/
    - deevolution 9y ago
      What is bitcoin futures? Is this speculative pricing on the speculative 2x fork?
      - mbaha 9y ago
        This reminds me of the scene in The Big Short where a manager casually talks about CDOs, synthetic CDOs and squared CDOs. And Steve Carell's character start asking: "what are squared CDOs... ?"
tmlee 9y ago
We attempted to snapshot the current situation with https://imgur.com/Zlopq7S https://imgur.com/Zlopq7S May be outdated now that 2X has been called off
- sosuke 9y ago
  Nice infographic! oh I just got an email from the Bitcoin Gold peeps saying they were going live in 2 days
- guiomie 9y ago
  I like your graphic. A cool metric to have on it would be transactions per second for each new fork.
nope96 9y ago
Do a little searching on the people pushing the "2x" Fork - Here's one example, CEO of OP's link Coinbase.com: >Coinbase CEO Owns More Ether Than Bitcoin - Coinjournal >Coinbase CEO Armstrong: Ethereum Scaling Better Than Bitcoin Another example, The head coder on the "2x" fork has announced his own coin to ICO soon, > Jeff Garzik, ... has seen its shortcomings firsthand. So he decided to create a better digital currency. All the people pushing the 2x fork are very heavily invested in coins competing with Bitcoin. It's odd.
- blhack 9y ago
  -Sees the flaws in bitcoin --Wants to fix it with a hardfork --Wants to fix it with a new coin I think the reason for your observation is pretty obvious
  - nope96 9y ago
    >--Wants to fix it with a hardfork That does not explain why He still won't adopt Segwit (the network upgrade that recently took place) on his sites coinbase.com and Gdax, which allows for 4MB blocks and cheaper transactions for his customers, in a backwards-compatible way (a Soft fork). Instead pushes for a second fork, a "hard fork", which would require every user in the ecosystem to switch to a new software (who's author is pushing an ICO coin sale of his own!). A fork which every single bitcoin developer (except the ICO-guy who hasn't contributed in 2 years) strongly opposes. Yes, not surprising that he blogs about Ether and owns more Ether and profits when people trade their Bitcoin into Ether on his sites. Same with the other big "2x" pusher who runs "Shapeshift" a site that turns your bitcoin into other coins and takes a cut%. These guys don't want to help bitcoin, they want to make money off the cryptocurrency space.
- flashmob 9y ago
  Both Brian & Jeff are still both heavily invested in businesses that rely on Bitcoin, they are not just speculators who simply buy and hold. Their business plans are ruined if Bitcoin fees get too high. Note that 'extremely low fees' was the original selling point of Bitcoin which now has been ruined. So they were simply defending their businesses.
known 9y ago
Forks foster creativity
Double_a_92 9y ago
So you have a ledger... Somebody makes a copy of it and adds "Gold" or "Cash" to the title. Then continues to use that ledger with some people however they want.
ricg 9y ago
Ok, stupid question: in real dollars, if I sell my ONE coin just before a fork or my then TWO coins right after the fork, will I end up with the same dollar amount? For that to happen the old coin type would have to lose in price at which the fork starts. How is the price for a coin of a fork determined?
- Sholmesy 9y ago
  That's a hard question, based around the market sentiment of the new coin. In theory, yes, the value is split. The value is only derived from speculation, and the speculative value of the coin 1ms pre-fork must be the same as the value of the two coins 1ms post-fork, since otherwise people would simply buy immediately before the fork, and then sell immediately after, driving the prices to an equilibrium. In reality, this is what has happened with this fork hype, people were buying w/ the idea of getting a 'free' coin, like how last time the value of Bitcoin + Bitcoin Cash was far higher than the original pre-fork value of Bitcoin. However, this has driven the price up, causing there to be even MORE hype, which will likely see the price of Bitcoin stay high, since it is now "trending up".
- redka 9y ago
  No you wouldn't. The price is determined by the orders that people place on the exchange and those can be anything
- celticninja 9y ago
  You are attaching way too much logic to working out the bitcoin price.
- tmlee 9y ago
  That applies to stock split; before the bitcoin cash split, everyone was expecting that should be the case. However in this market; market is irrational and it all depends on how the market is willing to price it pre/post fork. No, you won't wind up with the same dollar amount.
- lloeki 9y ago
  For all intents and purposes, from the point of view of each chain, the other does not exists but it merely turns out their past are the same. IOW BTC is B2X (the money, not the unit) before the fork, and each one considers that its own blockchain is the Truth†. So: - from the BTC point of view, there is 1 BTC both before and after the fork - from the B2X point of view, there is 1 B2X both before and after the fork - at any one time the value of 1 BTC is whatever people want to exchange it for - at any one time the value of 1 B2X is whatever people want to exchange it for - it just turns out that BTC == B2X before the fork Therefore the value of each one merely depends on how much people care to trade them for, and the fork may affect this value, both before and after. Both may crash, both may shoot through the roof, or anything in between independently. But yes indeed since they come from the same past, if T is the last common transaction on the blockchain, then in between T and T+1 your 1(BTC+B2X) == X$ just became 1BTC + 1B2X == Y$ + Z$ (which at that precise, immaterial, instant == X$ + X$) by virtue of the fact that they disagree about the validity of any transaction you may make on each chain, including ones that get $$ out of the system. Hence you can "double spend" the coin. But speculation may shortly thereafter make Y and Z stay == X$ + X$, or become X$ + 0$, or X/2$ + X/2$). † Without replay protection, transactions may or may not be replayed, but the blockchains do differ.
ricg 9y ago
Here's another stupid question: Can anybody start a new fork? Let's say, I invested in the original Bitcoin. Then somebody who has the marketing resources to build enough interest in a new coin comes along and decides to fork. Because of the hype around the new coin type, enough people are willing to trade it after the fork. I'm being given the same number of coins of the forked kind and the value of my original coins drops by the difference in value compared to the new coins (or around that). If I'd rather only invest in the original Bitcoin, I'd have to sell the forked coins immediately and buy the original Bitcoin back just to keep my investment value the same. If anybody can come along and fork: That sounds like in the world of stocks, a competitor could come along and decide to split the stocks of MY company from the outside, driving down the price of my stocks (me as the company's owner or investor) and there's nothing I can do about it.
- CydeWeys 9y ago
  Yes, anyone can start a fork. It's hard to get momentum on it though, as it'll likely just be a shitcoin that no one cares about. Witness what happened with Bitcoin Gold. So far there's only been one successful hardfork of Bitcoin (Bitcoin Cash) in all its history. Anyone can try, but few succeed.
  - kbart 9y ago
    Yes, but it doesn't answer the OP's question. What if government, official bank or other strong entity with virtually unlimited resources starts a fork (something like Ecoin for those who watch Mr. Robot)? I wouldn't call such event improbable.
    - beefield 9y ago
      I strongly assume that a strong entity would prefer to create a new coin from scratch instead of donating huge amounts of value to existing bitcoin owners.
    - bpicolo 9y ago
      > virtually unlimited resources Having resources doesn't matter, it's a hype-based economy
dmitriid 9y ago
> What is a Bitcoin fork? An attempt to pretend that an inherently inefficient non-scalable technology can be made efficient and scalable.
techno_modus 9y ago
So a Bitcoin fork is a kind of a git branch or at least one could think of it so. In this sense, it would be interesting to implement this possibility as a feature. Then everybody could start a new branch using new software branch. What is important, all such forks/branches will share the same parent paths (previous transactions). Essentially, all transactions will be represented as a git-like tree where each branch is managed by the corresponding software version.
kluck 9y ago
Physically a BitCoin is, when you look at it with your own eyes, nothing, not even air. And probably everyone knows what a fork is (metal thingy for eating stuff) ... so here is your answer. Everyone else who says otherwise, is probably employed by Bitcoin ;)
- nicky0 9y ago
  I'm sorry what was your answer??
ryan606 9y ago
If Coinbase only supports one version, what happens to the forked coins?
throwawaymanbot 9y ago
It's a utensil to eat your bitcoin with.
azimsai 9y ago
Informative post
659087 9y ago
Lately, it's an insider cash grab and market manipulation technique.

174 points by sds111 9y ago

deleted 9y ago

[deleted]

That helped but I do not understand the economic compatibility of a fork. How do they not wreak havoc and chaos on that coin's economy? Do I get coins for each of the new coins or do I have to pick? It all feels really risky and that risk feels foisted upon me. Can I cash out before the fork?

jeremyt 9y ago
Yes, if you hold during the fork you get coins on both forks. Yes you can cash out before the fork.
tomglynch 9y ago
Realistically, the value of the chain pre-fork should equal the value of the two chains post fork. However, this is not always the case - due to people thinking they can get 'free coins' from the other chain (price goes up), people being afraid of a fork (price goes down), etc
- Empact 9y ago
  When a fork occurs, you do not simply split the assets and community in two, you form 2 better-aligned independent groups pursuing currency success under two different sets of operative rules. Therefore new value is potentially created both in alignment and in the greater chance of one of these currencies hitting upon the set of rules that is ultimately successful in the space. Obviously this has limits - eg when the rules are already being exhaustively explored, there are no takers for the new currency, or developer attention is already the limiting factor.
  - njarboe 9y ago
    Sort of like when a company splits and the two parts are more valuable than the whole. Not common, but I believe Ebay and PayPal were more valuable post split. It idea floated at the time was PayPal growth was being held back by Ebay management.
- jiggunjer 9y ago
  Conservation of value. The first law of forkodynamics.
davidw 9y ago
"The only winning move is not to play" is always great advice.
- colordrops 9y ago
  Tell that to my 8000% returns.
  - celticninja 9y ago
    More like the only losing move is to not play.
  - 659087 9y ago
    https://en.wikipedia.org/wiki/Survivorship_bias https://en.wikipedia.org/wiki/Survivorship_bias
    - colordrops 9y ago
      Fully aware of that, it was meant in jest.
cjhanks 9y ago
I don't either. Fiat currencies don't fork - you can simply exchange one for another. Another close comparison is a traded equity having a 2:1 split, except shareholders technically lose nothing. Another case would be stock dilution - though, I have never heard of a public stock diluting to 50% value... that seems unlikely. If a specific commodity were to suddenly decide it had an unreported surplus on the order of 100% of current market estimates, the consequences on valuation would be pretty significant (maybe not a 2x loss...). I guess the closest comparison to bitcoin is; oil price is at $60 / barrel today and speculators believe there is a 30% chance that they mis-estimated the number of barrels by 100% - but you won't know for sure for another 3 months. What's should the price of oil be tomorrow?
- jstanley 9y ago
  That's not a close comparison at all. When a cryptocurrency forks, you keep the same amount of coins on both sides but the 2 are wholly incompatible with one another. A closer comparison is that you it's like 2 simultaneous futures, but with different consensus rules.
  - cjhanks 9y ago
    Oil futures exist and option prices are usually tied to speculation of quantity. If the price becomes wholly detached from scarcity; it's not a commodity or a currency, it's just means for speculative gambling.
- nikcub 9y ago
  > Fiat currencies don't fork There was an interesting situation after the fall of the Soviet Union. Because most of the states didn't have economies strong enough to support their own currency, they remained a unified currency union as part of the CIS The only problem was that each state then started printing the money like mad and then sending it to other states to be sold / traded. Some of the states then introduced what was a quasi two-currency system - to buy local currency or to exchange it, you required both the old Soviet Ruble and a new "permission" note from the state to exchange. In theory this placed a cap on the inflation but the result was almost like a currency fork. A lot of these states ended up establishing their own currencies but still had problems with "swaps" from the old currency - so they were constantly reissuing new notes and new coins that needed to be exchanged - but many of the old notes or permission slips would have value on the black market
jstanley 9y ago
You get coins for each of the forks. It's literally a fork in the timeline of the currency, as if you're exploring 2 simultaneous future timelines. You can "cash out" whenever you like, obviously.
tfha 9y ago
When a chain splits, your full previous balance exists now on both child chains. The price of each chain's coins is set by supply and demand. Typically people prefer to hold on to both coins after a split. So there's not actually that much sell pressure, meaning both coins can tend to exist together.
zodiac 9y ago
A fork is just a protocol upgrade that is non-backward-compatible and where both the old and new protocols have significant amount of validators (in PoW, this means miners) operating with that protocol. Since the protocols are not compatible, they have a different transaction history after the fork. Since they used to be compatible, if you had 1 BTC before the fork, after the fork, all validators still agree that you have 1 BTC, but 1 BTC on one chain is not the same as 1 BTC on the other chain, so it's equivalent to having (say) 1 BTC and 1 BCH. Everything else is just supply and demand, ie what's the market-clearing price for 1 BTC and for 1 BCH and how does it compare to before.
- arianvanp 9y ago
  Could I trade with that btc on both forks at the same time?
  - brazzy 9y ago
    After the fork you have 1 BTC which you can use only on the BTC chain, and 1 BTH which you can use only on the BTH chain. And these are completely separate.
  - zodiac 9y ago
    Think about it using my definition of fork, the answer should be clear
    - veli_joza 9y ago
      I wouldn't use expression 'protocol upgrade', that implies it's mandatory and that current protocol is rendered obsolete. I think 'fork' better explains the mechanics.

Beejeepa 9y ago

Coinbase is going to only support Bitcoin Cash.

vinniejames 9y ago
This is flat out false. They have no plan to even support it at all, let alone default to it
- acchow 9y ago
  "We are planning to have support for bitcoin cash by January 1, 2018" https://blog.coinbase.com/update-on-bitcoin-cash-8a67a7e8dbdf https://blog.coinbase.com/update-on-bitcoin-cash-8a67a7e8dbd...
  - vinniejames 9y ago
    “assuming no additional risks emerge during that time...We’ll make a determination at a later date about adding trading support” They do not have a plan to add it to the trading platform, which is the only thing that would drive any real value to the Bitcoin Cash market. The only reason they added it at all is to allow people to take their coin and sell it on another exchange, to avoid lawsuits. If they had any plan to add it to add it to the exchange. It would make much more sense to release it at the same time, thereby profiting off of the trading fees

mlamat 9y ago

A bitcoin fork is a political decision on the currency, like the ones central banks make. There are going to be a lot of forks in the future.

BinaryIdiot 9y ago
> There are going to be a lot of forks in the future. I tend to agree. The problem, then, is what happens after 3 forks? 4? 10? We're going to keep increasing the number of crypto currencies we own and then we figure to figure out who supports what version of the currency we have to figure out how to cash out... The entire idea of a fork sounds like an absolute nightmare. This is why I'm not putting any serious amount of money in crypto currencies.
- nikcub 9y ago
  More dangerous than the tech part of the fork IMO is that with any one fork one or more of the bitcoin deposit holding companies can decide at-will that they'll follow a fork as the "new" bitcoin This is an even bigger threat when you consider that they could be incentivized to follow a less valuable fork: exchange your new bitcoin for the old, convert all your users to the new bitcoin - you can now pocket the difference. On the other hand you can also attempt to keep the airdropped funds from forks. Coinbase at first didn't recognize the Bitcoin Cash fork - it was only with pressure that they relented. But there have been other trusted holders who just "ignored" forks
  - acchow 9y ago
    Or you could hold your own bitcoin in your own wallet.
    - nikcub 9y ago
      That's the moral of the story - but a lot of people don't I still haven't convinced my own brother that he needs to move his coins off-market - he said he'll "get around to it at some point" Also have tech friends who keep coins in Coinbase/Coinbase Vault

deleted 9y ago

[deleted]

alexasmyths 9y ago

This is an interesting paradox because the whole point of the system was that it was decentralized, and once set in motion the rules could not be changed. Or so they can? And who decides? Because these forks can have considerably favourable or negative outcomes for specific stakeholders, it's nary impossible to make the decision 'fairly' and this rather undermines the whole thing, no? And yes, I do understand that 'value' may be the same after such 'forks' but different post-fork mechanisms will imply different outcomes, surely. Would it be possible for nefarious actors to wedge themselves into this process? ... Because we were all looking for the 'technical fault' in the maths/encryption, we possibly missed this aspect of risk?

JauntyHatAngle 9y ago
>and once set in motion the rules could not be changed. This was not the case, nor has it ever been. There have been many consensus changes in the past, and bitcoin has had forks that were reverted by the bitcoin community previously. (See the bitcoin 0.8 fork). There have been multiple revisions of bitcoin which would have changed the rules. They haven't yet resulted in a hard fork permanently (except for bitcoin cash) because people have updated before the new consensus rules were activated.
colordrops 9y ago
Saying the rules can be changed is like saying that your eyes changed color if you have a child with different color eyes. A fork is not the same chain as the original.
- alexasmyths 9y ago
  All of the comments above lead me to understand that basically anything can happen with BTC and this kind of undermines it's value as a 'hard currency'. The whole point of decentralization was that nobody could control it, and devaluation was based on some algorithm, limited by tech. If these rules can change, then the intrinsic value of BTC is truly up in the air. What business would invest in using BTC as a currency knowing such things can arbitrarily happen?

rebuilder 9y ago

FYI the segwit2x fork this post was probably mainly motivated by appears to have been called off: https://lists.linuxfoundation.org/pipermail/bitcoin-segwit2x/2017-November/000685.html https://lists.linuxfoundation.org/pipermail/bitcoin-segwit2x...

tryingagainbro 9y ago
Until it's on again. Didn't they fork a few months ago too (Bitcoin Cash)?
- tmlee 9y ago
  Different camps, different forks, pushing different kind of agenda
- nikcub 9y ago
  Coinbase didn't sign the notice calling off segwit2x[0] even tho they were an NYA signatory - but rather said they were "monitoring"[1] the situation I sense some uncertainty from Coinbase on what they want to do next. edit: also interesting that the price for segwit2x futures has increased today to ~$380 after a low of $198[2] [0] https://lists.linuxfoundation.org/pipermail/bitcoin-segwit2x/2017-November/000685.html https://lists.linuxfoundation.org/pipermail/bitcoin-segwit2x... [1] https://twitter.com/coinbase/status/928476503062462464 https://twitter.com/coinbase/status/928476503062462464 [2] https://coinmarketcap.com/currencies/segwit2x/ https://coinmarketcap.com/currencies/segwit2x/
  - deevolution 9y ago
    What is bitcoin futures? Is this speculative pricing on the speculative 2x fork?
    - mbaha 9y ago
      This reminds me of the scene in The Big Short where a manager casually talks about CDOs, synthetic CDOs and squared CDOs. And Steve Carell's character start asking: "what are squared CDOs... ?"

tmlee 9y ago

We attempted to snapshot the current situation with https://imgur.com/Zlopq7S https://imgur.com/Zlopq7S May be outdated now that 2X has been called off

sosuke 9y ago
Nice infographic! oh I just got an email from the Bitcoin Gold peeps saying they were going live in 2 days
guiomie 9y ago
I like your graphic. A cool metric to have on it would be transactions per second for each new fork.

nope96 9y ago

Do a little searching on the people pushing the "2x" Fork - Here's one example, CEO of OP's link Coinbase.com: >Coinbase CEO Owns More Ether Than Bitcoin - Coinjournal >Coinbase CEO Armstrong: Ethereum Scaling Better Than Bitcoin Another example, The head coder on the "2x" fork has announced his own coin to ICO soon, > Jeff Garzik, ... has seen its shortcomings firsthand. So he decided to create a better digital currency. All the people pushing the 2x fork are very heavily invested in coins competing with Bitcoin. It's odd.

blhack 9y ago
-Sees the flaws in bitcoin --Wants to fix it with a hardfork --Wants to fix it with a new coin I think the reason for your observation is pretty obvious
- nope96 9y ago
  >--Wants to fix it with a hardfork That does not explain why He still won't adopt Segwit (the network upgrade that recently took place) on his sites coinbase.com and Gdax, which allows for 4MB blocks and cheaper transactions for his customers, in a backwards-compatible way (a Soft fork). Instead pushes for a second fork, a "hard fork", which would require every user in the ecosystem to switch to a new software (who's author is pushing an ICO coin sale of his own!). A fork which every single bitcoin developer (except the ICO-guy who hasn't contributed in 2 years) strongly opposes. Yes, not surprising that he blogs about Ether and owns more Ether and profits when people trade their Bitcoin into Ether on his sites. Same with the other big "2x" pusher who runs "Shapeshift" a site that turns your bitcoin into other coins and takes a cut%. These guys don't want to help bitcoin, they want to make money off the cryptocurrency space.
flashmob 9y ago
Both Brian & Jeff are still both heavily invested in businesses that rely on Bitcoin, they are not just speculators who simply buy and hold. Their business plans are ruined if Bitcoin fees get too high. Note that 'extremely low fees' was the original selling point of Bitcoin which now has been ruined. So they were simply defending their businesses.

known 9y ago

Forks foster creativity

Double_a_92 9y ago

So you have a ledger... Somebody makes a copy of it and adds "Gold" or "Cash" to the title. Then continues to use that ledger with some people however they want.

ricg 9y ago

Ok, stupid question: in real dollars, if I sell my ONE coin just before a fork or my then TWO coins right after the fork, will I end up with the same dollar amount? For that to happen the old coin type would have to lose in price at which the fork starts. How is the price for a coin of a fork determined?

Sholmesy 9y ago
That's a hard question, based around the market sentiment of the new coin. In theory, yes, the value is split. The value is only derived from speculation, and the speculative value of the coin 1ms pre-fork must be the same as the value of the two coins 1ms post-fork, since otherwise people would simply buy immediately before the fork, and then sell immediately after, driving the prices to an equilibrium. In reality, this is what has happened with this fork hype, people were buying w/ the idea of getting a 'free' coin, like how last time the value of Bitcoin + Bitcoin Cash was far higher than the original pre-fork value of Bitcoin. However, this has driven the price up, causing there to be even MORE hype, which will likely see the price of Bitcoin stay high, since it is now "trending up".
redka 9y ago
No you wouldn't. The price is determined by the orders that people place on the exchange and those can be anything
celticninja 9y ago
You are attaching way too much logic to working out the bitcoin price.
tmlee 9y ago
That applies to stock split; before the bitcoin cash split, everyone was expecting that should be the case. However in this market; market is irrational and it all depends on how the market is willing to price it pre/post fork. No, you won't wind up with the same dollar amount.
lloeki 9y ago
For all intents and purposes, from the point of view of each chain, the other does not exists but it merely turns out their past are the same. IOW BTC is B2X (the money, not the unit) before the fork, and each one considers that its own blockchain is the Truth†. So: - from the BTC point of view, there is 1 BTC both before and after the fork - from the B2X point of view, there is 1 B2X both before and after the fork - at any one time the value of 1 BTC is whatever people want to exchange it for - at any one time the value of 1 B2X is whatever people want to exchange it for - it just turns out that BTC == B2X before the fork Therefore the value of each one merely depends on how much people care to trade them for, and the fork may affect this value, both before and after. Both may crash, both may shoot through the roof, or anything in between independently. But yes indeed since they come from the same past, if T is the last common transaction on the blockchain, then in between T and T+1 your 1(BTC+B2X) == X$ just became 1BTC + 1B2X == Y$ + Z$ (which at that precise, immaterial, instant == X$ + X$) by virtue of the fact that they disagree about the validity of any transaction you may make on each chain, including ones that get $$ out of the system. Hence you can "double spend" the coin. But speculation may shortly thereafter make Y and Z stay == X$ + X$, or become X$ + 0$, or X/2$ + X/2$). † Without replay protection, transactions may or may not be replayed, but the blockchains do differ.

ricg 9y ago

Here's another stupid question: Can anybody start a new fork? Let's say, I invested in the original Bitcoin. Then somebody who has the marketing resources to build enough interest in a new coin comes along and decides to fork. Because of the hype around the new coin type, enough people are willing to trade it after the fork. I'm being given the same number of coins of the forked kind and the value of my original coins drops by the difference in value compared to the new coins (or around that). If I'd rather only invest in the original Bitcoin, I'd have to sell the forked coins immediately and buy the original Bitcoin back just to keep my investment value the same. If anybody can come along and fork: That sounds like in the world of stocks, a competitor could come along and decide to split the stocks of MY company from the outside, driving down the price of my stocks (me as the company's owner or investor) and there's nothing I can do about it.

CydeWeys 9y ago
Yes, anyone can start a fork. It's hard to get momentum on it though, as it'll likely just be a shitcoin that no one cares about. Witness what happened with Bitcoin Gold. So far there's only been one successful hardfork of Bitcoin (Bitcoin Cash) in all its history. Anyone can try, but few succeed.
- kbart 9y ago
  Yes, but it doesn't answer the OP's question. What if government, official bank or other strong entity with virtually unlimited resources starts a fork (something like Ecoin for those who watch Mr. Robot)? I wouldn't call such event improbable.
  - beefield 9y ago
    I strongly assume that a strong entity would prefer to create a new coin from scratch instead of donating huge amounts of value to existing bitcoin owners.
  - bpicolo 9y ago
    > virtually unlimited resources Having resources doesn't matter, it's a hype-based economy

dmitriid 9y ago

> What is a Bitcoin fork? An attempt to pretend that an inherently inefficient non-scalable technology can be made efficient and scalable.

techno_modus 9y ago

So a Bitcoin fork is a kind of a git branch or at least one could think of it so. In this sense, it would be interesting to implement this possibility as a feature. Then everybody could start a new branch using new software branch. What is important, all such forks/branches will share the same parent paths (previous transactions). Essentially, all transactions will be represented as a git-like tree where each branch is managed by the corresponding software version.

kluck 9y ago

Physically a BitCoin is, when you look at it with your own eyes, nothing, not even air. And probably everyone knows what a fork is (metal thingy for eating stuff) ... so here is your answer. Everyone else who says otherwise, is probably employed by Bitcoin ;)

nicky0 9y ago
I'm sorry what was your answer??

ryan606 9y ago

If Coinbase only supports one version, what happens to the forked coins?

throwawaymanbot 9y ago

It's a utensil to eat your bitcoin with.

azimsai 9y ago

Informative post

659087 9y ago

Lately, it's an insider cash grab and market manipulation technique.