We all know about previous hard fork of bitcoin which provided us with Bitcoin Cash. Although most people did not support this split, still bitcoin cash manages to be around with us.
This time bitcoin is getting hard fork twice, which means two more bitcoins will be seen in the market by the mid of November 2017. I came across with some complications ahead with bitcoin hard forks happening this time.
Bitcoin Gold (Hard Fork at Block No. 491407)
Major purpose of Bitcoin gold is to decentralize mining. This is one of the reasons Bitcoin Gold is coming up on Equihash Algorithm.
Since Equihash is ASIC proof, There will be no ASIC miners built to mine bitcoin gold, It's the same as we see in Ethereum Mining. By doing that developers are taking charge back from the mining companies and giving the mining power back to individual people by providing the mining on GPUs instead of ASICs.
This hard fork is expected to be released on October 25th 2017.
Bitcoin Segwit2x (Hard Fork at Block No. 494784)
This is a major hard fork and most complicated one for Bitcoin this time. As when this happens both the teams working on both sides of bitcoin wants to keep the legendary name Bitcoin.
Segwit2x is to expand blocksize even more, although some of bitcoin core developers support this change and some of them are rejecting it. This is going to be a very huge dispute with the complication we might not ready for. With this, as both are fighting to be the real Bitcoin, this chain split might end up with "Replay Attack". Call it a loop hole or a bug but this is not good for bitcoin future unless this matter gets resolved.
What is Replay Attack?
Since both the coins want to be the legendary "Bitcoin" on the same chain, resulting leaving kind of a loop hole. Lets try to understand with a live example.
If you have one bitcoin, after the chain split as we know, we get similar amount of bitcoin on the split chain, which means after hard fork you'll be having 1 Bitcoin and 1 Bitcoin Segwit 2x.
If you decide to send some Bitcoin to someone, that person can take that transaction raw data and broadcast it to Bitcoin Segwit 2x chain resulting similar amount of Bitcoin Segwit will be sent as well automatically. This is the case of visa versa. Any transaction happening on one chain split can be repeated to the other chain split.
This would be very risky for anyone to make any transactions on bitcoin especially from November 2017. untill we see both sides reaching to a conclusion, This is something can take bitcoin value down, due to more and more people getting aware of this and understanding the risk of spending either bitcoin or bitcoin segwit 2x.
What do you guys think of this? what is going to happen according to you? please let me know in the comment section below.
I would like to mention the steps @themystic has mentioned in comments on what should we do when 2x hard fork happens in November:
We need to be cautious but I think best thing we could do is the following:
- Your Bitcoins should be offline and you should have the private key.
- Do not touch your private key until the 2x wallet is released.
- Only when 2x wallet is released, immediately transfer a very small amount (negligible amount) of your original Bitcoins (BTC) to a new address. Assuming delays it may take time. Wait.
- Keep watching 2x coins on 2x chain through the explorer which would be available by then.
- Once you are sure you have the full balance on 2x chain, move all funds to new 2x address from the old address. This should be quick assuming lesser transaction than original Bitcoin.
- Now immediately move your original Bitcoin balance to the new address where you moved the partial Bitcoins as per step 3.
- Assuming BGold has replay protection we may either leave the BGold balance in the same address or move it to new address as per our wish.