Stay safe during the Bitcoin Cash hard fork.
What is Bitcoin Cash?
Bitcoin Cash (BCH) is an alternative bitcoin client to Bitcoin Core (BTC), which removes support for Segregated Witness (Segwit) & increases the base block size to 8MB. It shares a transaction history with Bitcoin Core up to the last block before the network hard fork occurs, which occurred on August 1 2017. Each public & private key pair on BTC, at the point of the fork, exists on both BTC and BCH immediately after the fork, so that every holder of BTC before the fork is technically able to receive the same amount of BCH after the fork. The Bitcoin Cash hard fork code was originally written for a Segwit2x UAHF (user-activated hard fork), should it have been deemed necessary for miners to activate following the originally intended BIP148 UASF (user-activated soft fork) on August 1.
Why is Bitcoin splitting into two chains?
The people contributing code to and maintaining the Bitcoin Cash and Bitcoin Core clients do not agree on the architecture for Bitcoin. Bitcoin Cash supports an architecture which enables more transaction throughput on-chain, by increasing the base block size and does not currently support layer 2 scaling via Segwit. Bitcoin Core, on the other hand, does not currently support a base block size increase, but rather supports increased transaction capacity on the Bitcoin chain via an effective block size increase that moves transaction signature data into a new block section, called Segwit. Segwit includes other features that enable layer 2 payment solutions on Bitcoin, that are expected to increase transaction throughput and reduce transaction fees, while only settling transactions to the main Bitcoin chain.
How much of a network disruption is the Bitcoin Cash UAHF expected to create?
The new BCH network appears to currently be supported by less than 15% of the current BTC network hashrate, so this fork is not currently expected to be a threat to the network security of the BTC network. Additionally, BCH offers replay protection and transactions on one chain are not expected to be duplicated on the other chain. There is currently low risk that the BTC network will be targeted by miners for a chain reorganization that would invalidate transactions. The BTC network should remain mostly unaffected after the fork occurs. Most bitcoin wallets and exchanges will temporarily halt bitcoin trading for a period leading up to and immediately after the hard fork, to ensure that it’s safe to transact on the BTC Bitcoin network again.
What happened to the BIP148 user-activated soft fork?
BIP148 was superseded by the activation of Segwit via BIP141, which was activated by BIP91. There was no UASF on August 1.
So there will be two Bitcoins after the fork?
Yes. It’s not yet clear that the Bitcoin Cash network will survive and be valuable to coin holders in the medium- to long term.
How do I safely store my BTC coins during the fork?
In order to keep your bitcoins safe, you should not normally store them on an exchange or wallet that has control over your private keys. If you have not already removed your BTC from a wallet or exchange with control over your private keys, then you should try to do so now. This may no longer be possible at this late stage due to many exchanges and wallets halting transaction during the fork. While having your bitcoin private keys in the custody of a wallet or exchanges poses a risk during the fork, this is not expected to result in a loss of your BTC bitcoins during the fork.
How do I get access to my new BCH coins?
Many exchanges and wallets have decided not to support the BCH hard fork and will not credit the new BCH coins to your wallet or account. Other wallets have created or are creating tools for you to access your coins on both Bitcoin chains. If you want more information about the policy and BCH support timelines of your specific bitcoin exchange or wallet, please reach out to their support teams.
Can I sell my new BCH?
Yes, you’ll be able to trade your BCH coins on any supporting exchange, once they’ve been listed on that exchange.
When can I start transacting safely on the original (BTC) Bitcoin network again?
Check for network status updates at https://bitcoin.org/en/alert/2017-07-12-potential-split until an all-clear is given.
If you have any other questions about how the Bitcoin Cash UAHF affects your account or bitcoin holdings on your specific bitcoin exchange or wallet, please reach out to their support teams.