August 1st kicks off a new month and a new direction for Bitcoin, the largest and most well known cryptocurrency.
As if June and July weren’t wild enough, August is almost guaranteed to continue the drama. Starting August 1st, Bitcoin is doing what is called a “user activated hard fork (UAHF). This means the user activated soft fork (UASF) also know as BIP148, will not happen.
By definition a hard fork is a split in the network because not all the users want to follow the fork. This is where technology and titans, and purists and idealists collide.
Back in April there was an agreement called SegWit2x, AKA the New York Agreement, between Bitmain and Bitcoin Core developers. Bitmain agreed that SegWit2x was a better choice and that seemed to end the politics.
When the 1st part of SegWit2x was activated recently (also called BIP91) ahead of August 1st’s BIP148, then most people thought that would mean the UAHF would be avoided.
That was the plan at least as it seemed like the better option as most wanted to avoid the hard fork.
Enter Bitcoin Cash (BCC) and its supporters. They are a peer-to-peer digital cash project which is surprisingly going full speed ahead now with their new coin. This also represents a definite hard fork on August 1st.
What does that mean to holders of Bitcoin?
If you own Bitcoin prior to August 1st you will have a situation similar to a stock split. However, in this case you’ll have the same amount of Bitcoin AND Bitcoin Cash. Since BCC futures are now trading at over $400 they’ll still have some value.
This also brings with it a LOT of questions such as pricing ratio, trading volume, miners, speed, difficulty, acceptance, etc.
Also, this is very important: not everyone is prepared to pay out your BCC. This would include the exchanges and the behemoth Coinbase. This is why it’s important to know this ahead of time so that you can take control of your Bitcoin holdings using your own private keys. Wallets that I would recommend using to ensure you get paid your BCC include Blockchain.info, Ledger, Trezor, and Jaxx.
The majority of the fork fight was over scaling and size limits. So yes, SOMETHING had to be done. Most just wanted to avoid the hard fork and not have 2 cryptocurrencies. Minus the hacking aspect, this is similar to what we saw with Ethereum and Ethereum classic becoming their own coins.
So what do the majority of Bitcoin investors think about all of this? Here is a screenshot from a twitter poll conducted by Litecoin founder Charlie Lee. Only 5% of the respondents voted in favor of selling their BTC to buy BCC.
That’s how August will start for Bitcoin. And as I like to say, “as goes Bitcoin, so go the altcoins.”
Will there be more more drama ahead? That remains to be seen, but I’ll be ready to bet my cold hard Bitcoin Cash it’ll be intriguing to watch it all unfold.