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What is a Bitcoin fork?

blog.coinbase.com

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Re: What is a Bitcoin fork?

#31

Post by nikcub »

BinaryIdiot wrote: post #27
mlamat wrote: post #5

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.

> 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 amoun…

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

Re: What is a Bitcoin fork?

#32

Post by nope96 »

blhack wrote: post #28
nope96 wrote: post #25

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 curr…

-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

>--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.

Re: What is a Bitcoin fork?

#33

Post by njarboe »

Empact wrote: post #24
tomglynch wrote: post #10

Earlier quoted context omitted.

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

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…

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.

Re: What is a Bitcoin fork?

#34

Post by acchow »

nikcub wrote: post #31
BinaryIdiot wrote: post #27

Earlier quoted context omitted.

> 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 amoun…

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 differ…

Or you could hold your own bitcoin in your own wallet.

Re: What is a Bitcoin fork?

#35

Post by flashmob »

nope96 wrote: post #25

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 curr…

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.

Re: What is a Bitcoin fork?

#36

Post by fernandopj »

nikcub wrote: post #29
cjhanks wrote: post #13

Earlier quoted context omitted.

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 1…

> 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 introduce…

> Fiat currencies don't fork

Another situation: in Brazil 90's, inflation was rampant and a new currency was being planned. But, until BRL was printed as the final currency, a few "forks"/new money were introduced, like URV (for one year), which set the market value for the new BRL, something like 2500:1 old-money:URV then 1:1 URV:BRL. So, the analogy: a fiat fork did happen and a two-currency system was put in play, until the "miners" decided to ultimately put the hash power into just one fork.

Re: What is a Bitcoin fork?

#37

Post by lowglow »

rebuilder wrote: post #16

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

Jackson Palmer (Dogecoin founder) talks all about the Bitcoin fork at the last local Hack Days meetup[0]. It's actually a really great talk.

[0](Skip to 30m) https://www.facebook.com/hackdays4all/videos/549774142034920...

Re: What is a Bitcoin fork?

#38

Post by zodiac »

Waterluvian wrote: post #3

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?

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.

Re: What is a Bitcoin fork?

#39

Post by drdrey »

alexasmyths wrote: post #14

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 'v…

It is decentralized, therefore the rules can change. The core devs can try to push changes, but miners and users can choose whether they upgrade (e.g. adopt the new rules) or not. If people disagree about the rules, then you have an actual fork with diverging histories (e.g. Bitcoin Cash vs Bitcoin)

Re: What is a Bitcoin fork?

#40

Post by nikcub »

acchow wrote: post #34
nikcub wrote: post #31

Earlier quoted context omitted.

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 differ…

Or you could hold your own bitcoin in your own wallet.

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

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