A Bitcoin Hard Fork is Coming and Creating New Money With ItJuly 30, 2017 | By: Sean Murray
On August 1st, Bitcoin will fork into two different currencies. That’s because a significant group of developers and miners believe that the Bitcoin protocol needs an upgrade in order to scale. Not everyone agrees so the chain is splitting in two. Since a split chain will share the same history, anyone who owns Bitcoin on one chain will automatically own the same amount of Bitcoin on the other chain. To avoid confusion, Bitcoins on the new chain will be called Bitcoin Cash.
You can think of this fork as a stock split except that Bitcoin & the new Bitcoin Cash will have a different value and future. An original Bitcoin at present has a value of about $2,700 per coin. Bitcoin Cash will likely be worth less.
If you store your Bitcoins on an exchange, you could actually miss out on getting your Bitcoin Cash. Coinbase, for example, an exchange based in San Francisco, said that its users will not be able to access Bitcoin Cash. In a letter they sent out to customers last week, they advised customers withdraw funds before the fork if they hope to benefit from Bitcoin Cash.
Dear Coinbase Customer,
We wanted to provide an update on proposed changes to the Bitcoin network and what that means for bitcoin stored on Coinbase. You can read more about what a digital currency fork is https://blog.coinbase.com/what-is-a-bitcoin-fork-cba07fe73ef1.
Our first priority is the safety of customer funds. In the event of a fork, customer fiat currency (USD, EUR and GBP) and digital currencies (bitcoin, ether and litecoin) are safe.
On August 1st, 2017 there is a proposal to make changes to the bitcoin software. This proposal, known as Bitcoin Cash, is likely to create a fork in the Bitcoin network. This means that after August 1st, 2017 there are likely to be two versions of the Bitcoin blockchain and two separate digital currencies.
In the event of two separate blockchains after August 1, 2017 we will only support one version. We have no plans to support the Bitcoin Cash fork. We have made this decision because it is hard to predict how long the alternative version of bitcoin will survive and if Bitcoin Cash will have future market value.
This means if there are two separate digital currencies – bitcoin (BTC) and bitcoin cash (BCC) – customers with Bitcoin stored on Coinbase will only have access to the current version of bitcoin we support (BTC). Customers will not have access to, or be able to withdraw, bitcoin cash (BCC).
Customers who wish to access both bitcoin (BTC) and bitcoin cash (BCC) need to withdraw bitcoin stored on Coinbase before 11.59 pm PT July 31, 2017. If you do not wish to access bitcoin cash (BCC) then no action is required.
We plan to temporarily suspend bitcoin buy / sells, deposits and withdrawals on August 1, 2017 as the fork is likely to cause disruption to the bitcoin network. This means your funds will be safe but you will be unable to access your bitcoin (BTC) for a short period of time.
If you are one of the few people in the alternative finance community who has still never owned, bought, or sold something with Bitcoin, Coinbase is a good place to start. They are fully licensed in New York State. Sign up here.
deBanked has accepted Bitcoin as a form of payment since 2014.
The value of a Bitcoin is up 63% year-to-date, according to the deBanked Tracker, while the S&P 500 is only up 10%.Last modified: July 30, 2017
Sean Murray is the founder of deBanked, an 11-year veteran of the merchant cash advance industry, a casual Lending Club and Prosper note investor, the co-founder of Daily Funder, an alternative lending speaker, consultant, writer, and enthusiast. Connect with me on LinkedIn or follow me on twitter.