The imminent Hard Fork and YOU
What is a hard fork?
A hard fork is when a block is broadcast under a new and different set of protocol rules which is accepted by nodes that have upgraded to support the new protocol. In this case, Bitcoin diverges from a single blockchain to two separate blockchains (a majority chain and a minority chain).
There will be two blockchains after a fork, is that right?
Yes, that is correct. Some argue that having two chains is problematic, but that is only the case if you believe that the minority chain will survive and have more market value than the majority chain.
Is a hard fork bad?
Hard forks are just protocol upgrades. If you want to have a better designed Bitcoin protocol, periodically you will have to upgrade (fork) to make it happen. A planned fork is nothing to panic about. In fact, just like with Bitcoin halving every four years, protocol upgrades can be celebrated too.
What will happen to my bitcoin when a fork happens?
Don’t worry, your bitcoin is safe! The most important thing as a user who wants to control their own money (bitcoin), is that you will want to store your bitcoin in a wallet where you have control over the private key. As long as you do that, post-fork you can spend your coins however you’d like. But if you leave your coins on an exchange for example where you may not have control over your private key, post-fork the exchange will have to determine which blockchain your coins belong to.
When will the fork happen?
Every fork is different, so generally speaking there isn’t one answer that can fit every scenario. Most recently the protocol upgrade that has caused the most news has been Bitcoin Unlimited (BU) and the consensus mechanism emergent consensus, which removes the temporary Bitcoin block size limit like the original client and lets the free market decide what block size is best, allowing for on-chain scaling. BU doesn’t have a set activation period. Once there is consensus among Bitcoin user nodes and mining nodes that signal an acceptable block size using BU, the blockchain will begin to diverge. For more information for miners on how to safely fork to BU, please read the ViaBTC Miner Guide.
Has a hard fork ever happened before?
Forks have successfully been implemented often in other cryptocurrencies. In fact there are very few instances of hard forks failing. On the Bitcoin blockchain there has already been one successful hard fork in the past. This hard fork was carried out in response to a serious bug found in Bitcoin that could be used to create billions of bitcoin. A hard fork was planned and carried out in a short amount of time to fix this bug.
Why is a hard fork likely to happen?
A fork is likely to happen due to a fundamental disagreement between different groups of the Bitcoin community on how the Bitcoin protocol will progress in the future. A long and important debate has carried on within the community for the past several years and consensus has been unable to be found on a path forward. A hard fork is one method for finding a way forward using using Nakamoto Consensus; read the Bitcoin Whitepaper to understand the underlying architecture of how Bitcoin was built.
I’ve heard about replay attacks when forking, what are they?
When there is a chain split, you may end up with coins on both sides of the blockchain (two coins), for example Bitcoin Core (BTC-C) and Bitcoin Unlimited (BTC-U). A replay attack is when a user broadcasts both coins on both blockchains, taking advantage of exchanges that might not have protection against these attacks. Recently Exchanges have reached out to the Bitcoin community for suggestions on the best way to handle these situations.
How can I keep track of the ongoing consensus finding of the fork?
There are many sites to keep track of how people are voting within the community. For example you can see how people are Economically voting, how miners are signaling and how user nodes are signaling