Saturday, July 29, 2017

How to Double Your Cryptocurrency (or, How to Not Lose Half Your Cryptocurrency)


This is NOT a technical piece on the likely coming "fork" of Bitcoin. Rather, it's just a very quick explainer on how to protect yourself and/or possibly make out well from that stuff.

The quick and dirty: On August 1st, what you now know as "Bitcoin" will become two currencies: Bitcoin (BTC) and Bitcoin Cash (BCC). This is happening because most of the Bitcoin community has agreed to implement something called Segwit 2x, while a minority have decided to go in a different direction by increasing the block size.

When this "hard fork" happens, under certain circumstances, your Bitcoin will "double" in a sense. That is, if you currently have one Bitcoin (1.0 BTC), you will suddenly have one Bitcoin (1.0 BTC) and one Bitcoin Cash (1.0 BCC).

Here's the under certain circumstances:

If your Bitcoin is in an online exchange AND that exchange supports both currencies, you should have equal amounts of each at the point where they split (if it doesn't, presumably your BCC will disappear, possibly into a wallet owned by that exchange, possibly not, but either way, you only have the one currency, and only have as much as you had of it).

Or, better yet, if you keep your Bitcoin in a walled to which you have the keys, you will definitely be able to manifest equal balances of each at point of fork.

I recommend the latter course. There are numerous wallets which allow the user to control/possess his or her own keys. Get one now and get your BTC moved into it before August 1st. I personally use and recommend the Jaxx wallet. The folks at Jaxx have not yet said whether they'll be supporting Bitcoin Cash, but it doesn't matter -- since the keys are yours, if they don't you can just plug your keys into a wallet that DOES support BCC after the fork happens.

Now, the VALUE of your cryptocurrency will not necessarily double. It could be that one or the other currencies will crash in value after the fork if most people don't want to mess with one of them. My perception is that most people expect moneyBTC to continue to be the premier cryptocurrency and BCC to likely fade away fairly quickly. But heck, as long as you CAN have both at no additional expense to yourself, it only makes sense to do so.

I've tried to keep this simple, and I'm not going to get into which currency I expect to better or why, or whether I prefer the BTC solution (Segwit 2x, which in theory eventually increases block size) or the BCC solution (massive increase in block size). The ONLY point of this post is to let you know that if you have Bitcoin in an online exchange and do not control the keys to your wallet, you should take care of that NOW to protect, and possibly enrich, yourself.

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