August 1st, 2017 was the day of possibly the most dramatic event thus far in the seven year history of Bitcoin. The divergence of the blockchain. Let’s explore the resulting changes and explain how how these changes are affecting you and the cryptocurrency sphere at large.
What the fork?
As Bitcoin is further adopted by the masses, the ever increasing transactions become an intrinsic scalability issue for the blockchain that is limited in the amount of transactions / second it can fulfill in a reasonable and cost efficient time frame. In order to temporarily fix this issue, the blockchain is forced to permanently diverge, or ‘fork’, creating a second blockchain, and thus, a new cryptocurrency. The chains have an identical history until the split – Bitcoin remains Bitcoin and the second currency is known as Bitcoin Cash or BCC. The client for Bitcoin Cash is ‘Bitcoin ABC’. The success behind Bitcoin Cash (and vicariously Bitcoin ABC) depends on miners. For Bitcoin ABC to succeed, enough miners need to move from Bitcoin (or possibly other cryptocurrencies) to the Bitcoin Cash blockchain, followed by an increase in demand and speculation thereof.
What happened to my BTC?
There is no need to panic! Your bitcoin are safe, but if you want to make sure you have access to your bitcoin cash, you should check with your exchange to see what their policy is. The safest plan was to have control of your private keys before the split. Cryptocurrency exchange Bittrex stated that they would provide users with BCC equivalent to the amount of BTC they had prior to the split. For example, user A holds 1 BTC on the bitcoin blockchain before the split. After the split, user A still has his or her 1 BTC on the bitcoin blockchain and will also have 1 BCC on the bitcoin cash blockchain. On the other hand, popular online wallet Coinbase stated they will not be supporting Bitcoin Cash until the beginning to 2018.
So… I have free money?
No, there is no such thing as free money in Bitcoin, or Cryptocurrency whatever. The value is simply shifted around, and split. As more people sell their Bitcoin or other alt coins for Bitcoin Cash, supply for Bitcoin and alt coins increases, thus driving the price down, while demand for Bitcoin Cash on the other hand increases, and hockey sticking up and to the right.
What popular exchanges presently support Bitcoin Cash?
As far as US exchanges, Kraken and Bitfinex (and Coinbase, as of January 1, 2018) have agreed to support BCC while Bitstamp, Gemini and GDAX have no plans to support BCC. The following is a list of exchanges that currently support BCC:
- Bitcoins Norway
- Bithumb (South Korea)
- Bitfinex (Hong Kong)
- Bittrex (US)
- Coinbase (US) [BEGINNING JANUARY 1, 2018)
- BTCBox (largest BTC exchange in Japan)
- Kraken (US and Europe)
- Korbit (South Korea)
- Mercury Cash (US)
- QuadrigaCX (Canada)
- QuoineEX (Singapore)
Should I buy Bitcoin Cash?
Although we don’t give investment or trading advice, it’s still important to note the effect the hard fork has had on the fiat value of Bitcoin as well as Bitcoin Cash – 5 days post fork. While bitcoin has held steady, bitcoin cash swung wildly this week, climbing above $700 Wednesday and plunging below $300 Friday. Remember that any new cryptocurrency, no matter its origin, should be thoroughly vetted prior to purchase.