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Stocks do the same thing, and after the split, the stock's price is determined by the market based on how much the new shares diluted the market. Seems like som
by bsbechtel 9y ago
Stocks do the same thing, and after the split, the stock's price is determined by the market based on how much the new shares diluted the market. Seems like something very similar will happen here, with the difference being each fork will have a differing value determined by the market's exchange rate between forks?
Edit: I think many are missing the point that a fork and the original BTC blockchain are not of equal value. Maybe a more apt analogy would have been countries in the EU leaving and issuing their own currency.
- sct202 9y agoI think the big difference is that companies can choose to split their stock or spin out new companies, but bitcoin forks can be done by basically anyone.
- deleted 9y ago[deleted]
- dmm 9y agoSome argue thinking of forks as a stock split is incorrect. """ Should it be treated as a split of BTC? That seems incorrect and complicated. If you half the value of your BTC holdings and sell them, you will incur more gains. However, could you determine how much were short-term and long-term? The BCH would also be classed as income at this point, since it now has a value, and so will incur income taxes. Unlike stocks that split, BCH and BTC are separate digital assets that have no common markets, and will have different values going forward. """ https://bitcoin.tax/blog/how-to-tax-bitcoin-cash-bch/ https://bitcoin.tax/blog/how-to-tax-bitcoin-cash-bch/
- ThirdFoundation 9y agoIt's funny, that's how things should work, but the crypto space has been so irrational it is not how things have effectively been priced in other splits. For example, Bitcoin Cash's split ended up being free money for consumers, which doesn't make sense in a rational market. Bitcoin Cash split from Bitcoin, but Bitcoin actually maintained value (and went up soon after). I'll wager most of these will have little affect on the price of Bitcoin. Often, the bigger issue is that no exchanges offer pairs for the new Bitcoin forks, so they're basically useless.
- qsucvatz 9y agoBitcoin Cash added new utility that SegWit lacked: 8 MB blocks, higher capacity, lower on-chain fees. That new utility is new value for Bitcoin holders. Another fork will add ZKP privacy, new utility and new value.
- smaili 9y agoTo be fair, stock splitting does not result in another entity being spawned (e.g., Apple didn't split into say, Apple and Apple "Cash" like Bitcoin and Bitcoin Cash). So in that sense, it is a bit different.
- planteen 9y agoCompanies spin-off like you are describing too. Except the market there is rational, as in, the market cap of the two split companies is equal to the previous market cap of the unsplit company. Look, for example, at Hewlett-Packard over the last 20 years: they spun off Agilent, which itself later spun off Verigy and Keysight, and the HP computer business is split into many parts now: HP, HPE, and DXC. https://en.wikipedia.org/wiki/Corporate_spin-off https://en.wikipedia.org/wiki/Corporate_spin-off
- wz1000 9y agoBitcoins are not stocks. Stocks represent claims on actual stuff. Bitcoins represent... nothing.
- 0xFFFF0000 9y agoBesides all the hype, etc. it at a minimum represents the amount of work/energy required to create a valid block to securely store data inside.
- 45h34jh53k4j 9y agoExcept the energy that has been burned in the last 9 years used to create them. The security comes from the need to spend as much energy to 'undo' them. Where do alts (esp non POW alts) get their value? Because people want to trade them to get more bitcoin, which has value as per above. You can keep repeating this circa 2014 argument 'not backed blah blah', but as yet it has not gone to 0, and likely never will.
- aussie1233 9y agoMinimum value would be the work/energy needwd to create blocks that enable safe storage and avoid double spending. So there is that.