Tomorrow on August 1st, there will be a hard fork in the bitcoin blockchain code that will create a new virtual currency called "Bitcoin Cash". This coming after the news of the mining community and bitcoin developers finally reaching some sort common ground when recently signalling for Segwit (segregated witness) which prunes old useless data from the blockchain and increases the blocksize to 2MB.

Bitcoin Cash increases the blocksize to an alarming 8MB. Fortunately that will be the BCC blockchain and not the bitcoin blockchain.

Why Is Bitcoin Cash Happening?

Despite finally arriving at a consensus for block size relief with Segwit, a portion of the community still didn't like it and are going to force a hard fork instead of promoting its solution in an effort to gain consensus. 

Typically when a solution, regardless of support for it, is present in what is called a BIP or bitcoin improvement proposal in the form of an IBIP, SBIP, or PBIP. Depending on the level of support and/or response from the community the proposal can be implemented by it's development team and presented to the industry for consensus. This is done by making the proposals implementation backwards compatible while consensus us reached. If consensus is reached, most agree that a 75% or better consensus constitutes consensus, then a date is further solidified to enable the code supporting the BIP. If activated, that portion of the code can make older versions of the bitcoin software obsolete and why such a high consensus is required.

Once the BIP is activated and running in the real world, it is considered the new code base and it's blockchain is the new ledger of record. Older versions of the bitcoin software may be incompatible at this point and may not work in full or at all. 

It's a daunting process that can require a great deal of debate as we have seen with the blocksize debate.

That said, in cases where the majority of support has shifted to another BIP and not the BIP an given development team was hoping for, that team can force a hard fork by activating their solution anyway vie UAHF (User Activated Hard Fork). This is the case with Bitcoin Cash which currently does not have consensus but wants their solution "out there" anyway.

With UAHF a couple things happen. First, the new solution becomes an Altcoin, in this case BCC (Bitcin Cash) and since the hard fork basically is a "version" of it's intended predecessor, users holding assets on the blockchain it is intended to replace end up with assets on both the original chain and the new chain.

We saw this with Ethereum last year, although backwards where the developers of Ethereum forced a hard fork claiming the new solution was the Ethereum network while the original chain became labeled Ethereum Classic and it's Ether became an Altcoin of the new Ethereum's Ether. However the truth is that Ethereum Classic is the original chain and there was a great deal of controversy surrounding that fork and it's consensus since it's purpose was primarily to steal back stolen coins.

So What is Going to Happen?

At midnight August 31st Bitcoin cash will become operation with hash power being it supporting it's blockchain. If you have any bitcoin stored on the blockchain, you will have BCC stored on the BCC blockchain. It's estimated value to begin will be something about 10% of bitcoins but watch for the massive dump as folks flock to dump BCC for a chance at "free money". From that point forward there will be the bitcoin network (the blockchain) as there always has been and there will be a new network for Bitcoin Cash which will be a new virtual currency (altcoin) that may or may not live long enough to see tomorrow. 

To avoid any problems many exchanges such as GDAX will be shutting down during the fork an halting all trading and transfers that could be inadvertently caught up in the mess and most large exchanges will not be supporting BCC. Some however, such as Kraken will be supporting the new virtual currency just as Ether Class was, and still is, supported.

That's about it, the process should be rather uneventful although look for some attempted fraudulent activity on the new network as well as the massive "dump" to complete the "pump" of recent days to unite as a pair. BCC should debut at it's highest value right after the fork. How long it will hold that value is yet to be seen but most seem to believe that past the initial "dump" the interest for Bitcoin Cash is non-existent. 

How Do I Get My BCC?

There's no magic process to be allotted any amount of BCC and it's possible you will not have the same amount of BCC as expected based on bitcoin's blockchain. Quite simply put you need only the private key of the wallet(s) holding your bitcoin. It will access the BCC on the BCC blockchain and you BCC will be in that copied wallet.

If you store bitcoin online with service such as Coinbase, you'll need to withdraw your bitcoin into a wallet you control and have access to the private key for. Coinbase, and many other online wallets will not be implementing any support for BCC and as a result there will be no way to obtain the equivalent value in BCC since you do not hold the private key of those service wallets.

To Hodl or Not To Hodl?

So should one hold BCC or sell? Those in support of BCC would like the world to get rid of bitcoin and opt for Bitcoin Cash (BCC), a common pitch among Altcoins on the planet. In reality, BCC doesn't appear to have much, if any, support long term and like most other Altcoins, it would likely need bitcoin in tact for survival.

For those reasons, the safest bet may be to dump-and-run as fast as you can since the price of BCC when it debuts is likely to plummet after a short rise in value. Long term it may or may not be viable and it certainly is going to be messy and a bit unknown as far as security and stability.

The danger in opening blocks to 8MB is also a concern. If bitcoin were to do this tomorrow, it could potentially bring the blockchain to a screeching halt as attacks against the network could overwhelm the blockchain with useless transactions and SPAM. This is the reason the 1MB limitation is in place to prevent in the 1st place and why scaling it slowly is the currently preferred approach that did reach consensus.

True Hard Fork?

Technically, this isn't really a true "hard fork". There have been arguably two hard forks in history, some say only 1 while others claim there never has been a hard fork. One being in 2012 which went in after two years of advanced notice and the other in support of BIP-50 however pre-BIP-50 clients were reportedly operational past the fork which would categorize that fork as soft.

Typically an accepted "hard-fork" would promote the new chain as the continuation of the original giving the support as in full consensus as was with Segwit recently. In this case bitcoin currently will continue to be bitcoin on August 2nd with no change at all. There will just be a new virtual currency called Bitcoin Cash that will have nothing to do with bitcoin at all other than the copied balances from the original network and what folks are hoping to cash-on with the "free-money" grasp.

There's nothing wrong with that really, holders aren't the ones doing this and if this gives them a bonus then so be it.

Since bitcoin will remain bitcoin, this isn't really hard-fork for bitcoin, it's a hard-fork creating another token.

What You Need To Do 

If you don't care about Bitcoin Cash then you don't need to do anything at all. Life will continue as normal tomorrow and beyond.

If you do want BCC, you'll need your private keys and if you don't have bitcoin stored in a wallet you have control over then you likely don't have your private keys, so withdraw the bitcoin ASAP and put the value in a wallet you control such as Electrum or bitcoin core itself.

You'll need you private keys tomorrow if you plan to make a cash-grab.

Another note, Kraken and a few other smaller exchanges plan to support BCC trading, so you'll need accounts there because most of the larger exchanges will not be supporting BCC.

If you get stuck or need some help, you can always contact us at [email protected] and we'll be happy to lend a hand.

Get on it!

Article by dinbits
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