Bitcoin May Split Many Times in 2018(bloomberg.com)
bloomberg.com
Bitcoin May Split Many Times in 2018
https://www.bloomberg.com/news/articles/2018-01-23/bitcoin-may-split-50-times-in-2018-as-forking-craze-accelerates
81 comments
> Bitcoin Cash is the only 'true' fork that survived beyond the splitting of the BTC chain, but please correct me if I'm wrong on that.
There's at least a few more. "Bitcoin Gold" and "Bitcoin Diamond" come to mind, there's also something called "Super Bitcoin". They all seems like complete trash to me but somehow they seem to have a market value
There's at least a few more. "Bitcoin Gold" and "Bitcoin Diamond" come to mind, there's also something called "Super Bitcoin". They all seems like complete trash to me but somehow they seem to have a market value
> They all seems like complete trash to me but somehow they seem to have a market value
This is probably the defining comment of this age of blockchain. :-)
This is probably the defining comment of this age of blockchain. :-)
How do Bitcoin holders "receive" or trade on these forks?
Coinbase eventually distributed Bitcoin Cash but I haven't heard anything about Bitcoin Gold or Diamond.
Coinbase eventually distributed Bitcoin Cash but I haven't heard anything about Bitcoin Gold or Diamond.
If you have your private key, you can just use same key to trade forked coins (using given coin's wallet). If you don't I guess you depend on whoever has your key. But rule of thumb is, you don't own a key, you don't own a bitcoin.
I would just move original coins to different wallet first as I'm not sure if same transaction cannot be replayed on main bitcoin chain.
You can check here what you can get for your addresses https://btcdiv.com/
I would just move original coins to different wallet first as I'm not sure if same transaction cannot be replayed on main bitcoin chain.
You can check here what you can get for your addresses https://btcdiv.com/
If you had bitcoin before the fork, you'd have some of the fork, right?
How do you access something like that?
If you hold the the private key of the coin, simply download the forked coin client and sync with the old key. The money should automatically appeared.
The story is more out of control if you hold the money in the trader. Since you had to rely on the trader to enable support for that new coin, which may happen later or not happen at all.
The story is more out of control if you hold the money in the trader. Since you had to rely on the trader to enable support for that new coin, which may happen later or not happen at all.
Well, the correct word is "hard" fork. Bitcoin gold is another hard fork of Bitcoin which survived.
Though there are several software forks based on bitcoin client implementation like Bitcoin XT and Bitcoin Unlimited.
Though there are several software forks based on bitcoin client implementation like Bitcoin XT and Bitcoin Unlimited.
Are you aware of anywhere that keeps data like that as a reference? CoinMarketCap groups into coins and tokens, but not into soft/hard forks of which codebases.
Although I suppose at a certain point you'd get into the argument about how many changes are required to make it a new codebase even though it originally forked... but a question for another time perhaps.
Although I suppose at a certain point you'd get into the argument about how many changes are required to make it a new codebase even though it originally forked... but a question for another time perhaps.
Well at least for bitcoin there's a nice summary by BitMEX Research [1]
[1] https://blog.bitmex.com/bitcoins-consensus-forks/
[1] https://blog.bitmex.com/bitcoins-consensus-forks/
There is a limited list on wikipedia:
https://en.wikipedia.org/wiki/List_of_Bitcoin_forks
Most forks which have no value are quickly forgotten so this might be a reliable list.
https://en.wikipedia.org/wiki/List_of_Bitcoin_forks
Most forks which have no value are quickly forgotten so this might be a reliable list.
I think the main difference between the two kinds of forks is that in one case existing holders of Bitcoin get to own both the original and the fork, and in the other case the fork must bootstrap itself from scratch without the added benefit of a bunch of biased people who are happy to see any new speculative endeavor grow (as long as they own some).
Hence, hard forks are actually much more likely to occur, at least until the inverse network effects you describe actually exist in reality. In a highly speculative market they really don't exist, or at least don't exist enough to discourage a fair bit of aggressive forking. I predict at least two hard forks in 2018.
Hence, hard forks are actually much more likely to occur, at least until the inverse network effects you describe actually exist in reality. In a highly speculative market they really don't exist, or at least don't exist enough to discourage a fair bit of aggressive forking. I predict at least two hard forks in 2018.
> hard forks are actually much more likely to occur, at least until the inverse network effects you describe actually exist in reality.
I am working on an article that talks about the opposing incentives behind hard forks as a form of artificial scarcity. This seems to be the main objection from classical financial types, that its all virtual and you can make more at any time by forking so its worthless.
Your comment implies thoughtfulness on this topic. Do you have any good references on this from an economic theory standpoint?
I could argue that there are actually two kinds of hard forks, one where there is some change to the underlying protocol (Bitcoin Cash) or reallocation of funds (undoing the DAO hack) that, at least in the eyes of the authors, increases the utility of the new network more than the negative effect of the split. If the total network value rises then, in a rational market, it means that the utility did increase.
A second kind of fork is just a cash-grab fork. Split the bitcoin chain but don't do anything to the protocol, ala https://forkgen.tech. This is (I think) what concerns finance professionals more than forks which increase utility.
I am working on an article that talks about the opposing incentives behind hard forks as a form of artificial scarcity. This seems to be the main objection from classical financial types, that its all virtual and you can make more at any time by forking so its worthless.
Your comment implies thoughtfulness on this topic. Do you have any good references on this from an economic theory standpoint?
I could argue that there are actually two kinds of hard forks, one where there is some change to the underlying protocol (Bitcoin Cash) or reallocation of funds (undoing the DAO hack) that, at least in the eyes of the authors, increases the utility of the new network more than the negative effect of the split. If the total network value rises then, in a rational market, it means that the utility did increase.
A second kind of fork is just a cash-grab fork. Split the bitcoin chain but don't do anything to the protocol, ala https://forkgen.tech. This is (I think) what concerns finance professionals more than forks which increase utility.
> I could argue that there are actually two kinds of hard forks, one where there is some change to the underlying protocol (Bitcoin Cash) or reallocation of funds (undoing the DAO hack) that, at least in the eyes of the authors, increases the utility of the new network more than the negative effect of the split. If the total network value rises then, in a rational market, it means that the utility did increase.
I think this is exactly correct from an economic perspective. But I think that in the heavily speculative market it will take a while for the market to actually converge into the state that you describe.
I'd argue that right now there is virtually no disincentive for doing hard forks, except perhaps for the friction entailed in getting it listed on Coinbase. If a hard fork "launches" with a low price, many speculators will simply view it as a buy opportunity, whereas if it launches with a high price, it has already achieved some level of legitimacy.
This is because hard forks that are effectively governance changes are not really purchased for fundamentals-based reasons at this point, because the governance aspects of BTC have really not been tested much to date.
I actually have in mind a few very interesting hard forks if you would like to collaborate and attempt to make some money by launching these with me in the process :) I too am interested in it from a research perspective but it's very tempting to try to "add value" by launching some important hard forks that the community hasn't thought of yet.
I think this is exactly correct from an economic perspective. But I think that in the heavily speculative market it will take a while for the market to actually converge into the state that you describe.
I'd argue that right now there is virtually no disincentive for doing hard forks, except perhaps for the friction entailed in getting it listed on Coinbase. If a hard fork "launches" with a low price, many speculators will simply view it as a buy opportunity, whereas if it launches with a high price, it has already achieved some level of legitimacy.
This is because hard forks that are effectively governance changes are not really purchased for fundamentals-based reasons at this point, because the governance aspects of BTC have really not been tested much to date.
I actually have in mind a few very interesting hard forks if you would like to collaborate and attempt to make some money by launching these with me in the process :) I too am interested in it from a research perspective but it's very tempting to try to "add value" by launching some important hard forks that the community hasn't thought of yet.
Sounds like we are thinking alike.
I don't think HN has direct messaging, but shoot me an email to odonnell.phil at the service that shall not be named but but in all likelihood starts with a G and rhymes with Email.
I don't think HN has direct messaging, but shoot me an email to odonnell.phil at the service that shall not be named but but in all likelihood starts with a G and rhymes with Email.
IMO, what happened with Ethereum was not exactly the correct economic perspective. More like the ethereum devs went on to support the Ethereum and ditched the coin. Bitcoin Cash/Gold on the other hand seems fine.
> except perhaps for the friction entailed in getting it listed on Coinbase
And therein lies the rub. I'd say its not only Coinbase but exchanges in general. My understanding is that even the worse of exchanges like HitBtc charge 25 BTC to list a coin.
So, if you have plans to make at least 25-30 BTC to get through the exchange doors, count me in :P
> except perhaps for the friction entailed in getting it listed on Coinbase
And therein lies the rub. I'd say its not only Coinbase but exchanges in general. My understanding is that even the worse of exchanges like HitBtc charge 25 BTC to list a coin.
So, if you have plans to make at least 25-30 BTC to get through the exchange doors, count me in :P
> IMO, what happened with Ethereum was not exactly the correct economic perspective. More like the ethereum devs went on to support the Ethereum and ditched the coin. Bitcoin Cash/Gold on the other hand seems fine.
I agree with this, actually. The hard fork showed that ETH would be forcibly redistributed if the result of correct VM behavior was not what the maintainers had in mind.
So the ETH hard fork fits into the very typical pattern in human institutions of excessive centralization resulting in corrupt behavior. Most of the early adopters of ETH who lost money due to the DAO attack were essentially the political allies of the maintainers, who in turn held great sway with miners. We've recently learned that ETH mining is far more centralized than BTC.
The ETH hard fork was a nice wakeup call that even for supposedly enlightened proponents of decentralization and distributed consensus, when there is real money on the line pretty much any excuse will be acceptable for why the "theft" had to be unwound via a hard fork.
Ironically, in order for market incentives to work properly in a smart contract system, finding exploitable cases of correct (or incorrect) behavior of the VM should result in profit, or else there is simply no market incentive for the system to be secure and to behave in a predictable manner.
In order for Ethereum to have passed the institutional test imposed on it by the DAO hack, it would have had to deal with the difficult issue of victims of the attack claiming "theft" and would have had to allow the difficult lesson to be learned. Now that we know that Ethereum was a toy when the DAO hack occurred, when will it stop being a toy? Is the current fork real?
Anyway, apologies for the hyperbole, I just wanted to make the above point.
I agree with this, actually. The hard fork showed that ETH would be forcibly redistributed if the result of correct VM behavior was not what the maintainers had in mind.
So the ETH hard fork fits into the very typical pattern in human institutions of excessive centralization resulting in corrupt behavior. Most of the early adopters of ETH who lost money due to the DAO attack were essentially the political allies of the maintainers, who in turn held great sway with miners. We've recently learned that ETH mining is far more centralized than BTC.
The ETH hard fork was a nice wakeup call that even for supposedly enlightened proponents of decentralization and distributed consensus, when there is real money on the line pretty much any excuse will be acceptable for why the "theft" had to be unwound via a hard fork.
Ironically, in order for market incentives to work properly in a smart contract system, finding exploitable cases of correct (or incorrect) behavior of the VM should result in profit, or else there is simply no market incentive for the system to be secure and to behave in a predictable manner.
In order for Ethereum to have passed the institutional test imposed on it by the DAO hack, it would have had to deal with the difficult issue of victims of the attack claiming "theft" and would have had to allow the difficult lesson to be learned. Now that we know that Ethereum was a toy when the DAO hack occurred, when will it stop being a toy? Is the current fork real?
Anyway, apologies for the hyperbole, I just wanted to make the above point.
> Bitcoin Cash is the only 'true' fork that survived beyond the splitting of the BTC chain
This seems like a "No True Scotsman" fallacy and isn't correct unless you take liberties with the concept of "true fork" or you are making an observation about the lack of mass-scale adoption of the smaller forks.
Every protocol change in Bitcoin is in the most literal sense a "fork". There was a time at which the proposed protocol change might or might not survive the fork attempt. The community (developers, miners, holders, transactors, etc) all vote with their feet.
This seems like a "No True Scotsman" fallacy and isn't correct unless you take liberties with the concept of "true fork" or you are making an observation about the lack of mass-scale adoption of the smaller forks.
Every protocol change in Bitcoin is in the most literal sense a "fork". There was a time at which the proposed protocol change might or might not survive the fork attempt. The community (developers, miners, holders, transactors, etc) all vote with their feet.
> lack of mass-scale adoption of the smaller forks.
Yeah, this was the context I was using it in. 'True' meaning like 'survived' in any real sense.
Yeah, this was the context I was using it in. 'True' meaning like 'survived' in any real sense.
The tax situation is interesting. Many believe that you owe taxes as soon as the funds for a bitcon fork are available to you. For someone with bitcoin in a private wallet that's instantly. For someone with bitcoin in an exchange that's whenever the exchange implements the coin or you withdraw to a private wallet.
For example bitcoin cash was forked August 1, 2017 but coinbase didn't implement it until December 19, 2017.
https://bitcoin.tax/blog/how-to-tax-bitcoin-cash-bch/
For example bitcoin cash was forked August 1, 2017 but coinbase didn't implement it until December 19, 2017.
https://bitcoin.tax/blog/how-to-tax-bitcoin-cash-bch/
Isn't it treated as an unrealised capital gain?
New tax bill specifies that currency-to-currency transfers are now taxable events, I assume this falls in line. It's not only about turning things into fiat.
Really the law's going to have to adapt here if people are ever going to use crypto as an actual currency. Owing capital gains every time you order a latte is nuts.
Really the law's going to have to adapt here if people are ever going to use crypto as an actual currency. Owing capital gains every time you order a latte is nuts.
The site I linked argues not because unrealized gains occur when something you own goes up in value. But during a fork you are given (access to) something new.
And if you realize it I imagine your strike price was $0, so its full profit. IANAL tho.
(This thought experiment may be completely wrong, I'm unfamiliar with US tax law)
If people were attempting to propose improvements via forking and this were true, would that not create rather dire tax liabilities?
Say you bought into bitcoin 'original', and then it forks into bitcoin 'improved' as well. Loads of people agree that the improved version is much better and switch to it, leaving the original near worthless.
But then if this interpretation of tax rules were true you'd be left paying cap gains on the full value of the improved version, rather than the difference between original and improved at sale time. Ouch.
If people were attempting to propose improvements via forking and this were true, would that not create rather dire tax liabilities?
Say you bought into bitcoin 'original', and then it forks into bitcoin 'improved' as well. Loads of people agree that the improved version is much better and switch to it, leaving the original near worthless.
But then if this interpretation of tax rules were true you'd be left paying cap gains on the full value of the improved version, rather than the difference between original and improved at sale time. Ouch.
I think there's an implication in your thought process that the 'bitcoin original' value, which you bought into, goes to $0. This would constitute a capital loss, and you would have gains up from $0 on the secondary blockchain ('bitcoin improved'). This would seem reasonable to me, as it's essentially a wash. The only thing that would muddy the whole thing up is the holding period for short term and long term capital gains.
It illustrates how ludicrous the idea of being taxed for a fork is (along with taxes on crypto not exchanged for fiat in general). I had never even heard of most of the forks discussed in this article. Were I a holder of BTC, how am I supposed to pay taxes on the "wealth" "generated" from forks I didn't even know existed?
The idea of crypto taxation (besides forks) is same as stocks. Thus, selling crypto for fiat is same as selling crypto to buy another crypto tax wise.
Taxation in general is not a happy event, but it is consistent in this case.
Taxation in general is not a happy event, but it is consistent in this case.
Once again - you expect people to somehow magically track the value on 20 hard forks in 2017, many are scam / not listed on US sites / unclear value, and on the 50 hard forks in 2018? Not possible - not feasible - and goes counter to what many EAs and CPAs are advising their clients. People need to stop giving "couch" advise without considering the consequences.
Best effort. If you went the lengths to "cash it out" because it was free money, you should pay someone to keep track of it for you, if you don't intend to.
Wasn't the whole point of bitcoin that it was auditable? IF you know and want to use a fork for something, you can figure out the exact price fork has happened.
IF you don't know, you have plausible deniability.
Wasn't the whole point of bitcoin that it was auditable? IF you know and want to use a fork for something, you can figure out the exact price fork has happened.
IF you don't know, you have plausible deniability.
Responded somewhere else; but to be fair hard forks should be unrealized gain with 0 cap gains. IF/when someone wants to cash out is when they should pay the tax. It resolves the bad actor issue with scam coins; meets the need to pay tax on gains and ultimately saves everyone in bitcoin land (or other crypto for that matter) from inadvertently not declaring income. It's a win win for everyone; including the IRS. This is the most common sense approach and it stuns me that many of the couch / tax advisers are positioning otherwise.
I agree with this, and i hope this is how hard forks are taxed. It makes sense to me.
Also, many cryptos' primary use case is a replacement for fiat that isn't centrally controlled. Saying that you shouldn't pay taxes on crypto to crypto is similar to saying that you shouldn't pay taxes at all.
Tax avoidance is one of the benefits of using cryptocurrency as a currency. Yeah, I'll say it.
But what is bitcoin except a database plus some math equations? By "owning" bitcoin, you have a cryptographic key which lets you do certain operations on the database. At what point does this all get abstracted far enough from real money that it becomes ludicrous to tax it?
Obviously, the US government and most cryptocurrency users have widely differing opinions on that.
But what is bitcoin except a database plus some math equations? By "owning" bitcoin, you have a cryptographic key which lets you do certain operations on the database. At what point does this all get abstracted far enough from real money that it becomes ludicrous to tax it?
Obviously, the US government and most cryptocurrency users have widely differing opinions on that.
With the same logic, my stocks in my brokerage is an entry in the database where i hold the password. I don't ever recall owning a paper stock, for example.
If i keep it in the brokerage, without withdrawing the cash, why do i pay taxes? That sounds stupid right? Then the next thing you know, people sell each other stocks in exchange for goods.
"Plumbing service stock" on a broker, if you buy it, you get legal right to have plumbing service at your house free of charge. This way you can keep everything in brokerages. Of course there are flaws with the argument, but saying "crypto to crypto isn't taxable" ignores the fact that USD taxation happens based on USD.
PS: while i said usd, i mistakenly wrote USDT, which was very ironic haha.
If i keep it in the brokerage, without withdrawing the cash, why do i pay taxes? That sounds stupid right? Then the next thing you know, people sell each other stocks in exchange for goods.
"Plumbing service stock" on a broker, if you buy it, you get legal right to have plumbing service at your house free of charge. This way you can keep everything in brokerages. Of course there are flaws with the argument, but saying "crypto to crypto isn't taxable" ignores the fact that USD taxation happens based on USD.
PS: while i said usd, i mistakenly wrote USDT, which was very ironic haha.
Most cryptocurrency users are chasing their own moon.
I agree that it's not practical to do book keeping if you want to buy real world goods with crypto (you cannot keep calculating capital gains everytime you buy a coffee with it), but that's not the common use today _anyway_.
This is also the exact reason why it's taxed the way its taxed. There's no way government is gonna let you build wealth without paying taxes.
Private key is surely a database password that lets you do certain operations, but that exact feature make it an asset. As long as you can buy "things" that has value with it, it's a capital you need to pay taxes on.
It's hard, but it's what it is.
This is also the exact reason why it's taxed the way its taxed. There's no way government is gonna let you build wealth without paying taxes.
Private key is surely a database password that lets you do certain operations, but that exact feature make it an asset. As long as you can buy "things" that has value with it, it's a capital you need to pay taxes on.
It's hard, but it's what it is.
I personally think cryptocurrency is more interesting as a currency than as an investment. I want "Satoshi's vision" to catch on.
But you're right, the reality is that many are using it as an investment instead, so now, I suppose, it's being regulated like one. Unfortunately, at the same time that we solve some of the problems making usage as a currency impractical (even if one of those solutions is just Bitcoin Core becoming an outdated relic), regulations treating it as an investment will hamper its adoption.
Oh well. I have faith the tech will win in the end.
But you're right, the reality is that many are using it as an investment instead, so now, I suppose, it's being regulated like one. Unfortunately, at the same time that we solve some of the problems making usage as a currency impractical (even if one of those solutions is just Bitcoin Core becoming an outdated relic), regulations treating it as an investment will hamper its adoption.
Oh well. I have faith the tech will win in the end.
I am all for parts of satoshis vision. I wish it was somehow universally accepted, so i could give my dollars and get them burned (legally, somehow), and can keep transacting with my digital coin.
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This seems to be a greater indictment of taxation in general rather than the notion of an asset created to represent something of value in the market. An unscrupulous state actor could manipulate this system to their advantage.
>Many believe that you owe taxes as soon as the funds for a bitcon fork are available to you.
I think that belief is mistaken. (1) Suppose Bitcoin has a contentious fork into two chains, say BitcoinA and BitcoinB. The supporters of each chain claim that their chain is the "true" Bitcoin. Before the split, you had 1 btc worth $10k, and after the fork, you have 1 btcA worth $5k and 1 btcB worth $5k. Which of the two chains do you owe taxes on? (2) Even if a hard-forked chain is treated as a new asset instead of a split of an old asset, it shouldn't be taxed until the user actually exercises control over it. In order to control funds on a new hard fork, generally the user must take the risky action of installing new (potentially malicious) software and importing their private keys --- this would seem to be a "substantial limitation or restriction" under 26 CFR 1.451-2(a).
I think that belief is mistaken. (1) Suppose Bitcoin has a contentious fork into two chains, say BitcoinA and BitcoinB. The supporters of each chain claim that their chain is the "true" Bitcoin. Before the split, you had 1 btc worth $10k, and after the fork, you have 1 btcA worth $5k and 1 btcB worth $5k. Which of the two chains do you owe taxes on? (2) Even if a hard-forked chain is treated as a new asset instead of a split of an old asset, it shouldn't be taxed until the user actually exercises control over it. In order to control funds on a new hard fork, generally the user must take the risky action of installing new (potentially malicious) software and importing their private keys --- this would seem to be a "substantial limitation or restriction" under 26 CFR 1.451-2(a).
That's an interesting position. This is definitely an area that needs more clarification. I do think that treating forks like income is the most conservative interpretation and the one least likely to result in trouble from the IRS.
Really? So you're going to declare income on the 20 hard forks in 2017 (many were scams / questionable value... if any, also not listed on US exchanges), and on the 50 hard forks this year? Don't you think this is a bit insane??
There should be some sort of value threshold or something similar. If your holdings of the hard fork's resulting coin is worth less than some trivial amount, then it shouldn't be necessary. But if for some crazy reason the market decides that another joke like Bitcoin Cash is actually worth some significant amount, then it seems hard to argue that this should somehow be immune to tax.
Sure I agree that there be a way to differentiate, but the only reasonable approach is that the new fork coins should be unrealized gains until when (or if) you use them (aka trade/sell). It has a 0 cost basis until proven otherwise. Seems simple; meets the requirements; stops bad actors. Only negative is IRS may only get long-term cap gains if someone holds it for a long-time.
Take care when claiming coins from those forks - even if only for transferring them to an exchange. Wallet software for those altcoins usually come as an unsigned, unverifiable binary and ask you to import your existing mainchain private keys (explicitly or as wallet.dat). Doing so is a best way to lose your BTC should authors get hold of those keys.
Much safer solution is to craft transaction offline on a separate VM (using BCCSplitter [1] or altcoin wallet) and then posting raw transaction using altcoin's blockexplorer or yet another instance of altcoin wallet software (not containing any private keys).
[1] https://github.com/NicolasDorier/BCCSpliter
Much safer solution is to craft transaction offline on a separate VM (using BCCSplitter [1] or altcoin wallet) and then posting raw transaction using altcoin's blockexplorer or yet another instance of altcoin wallet software (not containing any private keys).
[1] https://github.com/NicolasDorier/BCCSpliter
or transfer BTC to different wallet before claiming forked coins
It depends. If you import whole wallet.dat into altcoin wallet, you share both present and future (next 100 or so) private keys with the software.
If you transfer your bitcoins to new address provided by existing bitcoin wallet, chances are the altcoin wallet also has a private key to those addresses.
To be safe, you'd have to transfer existing bitcoin funds to completely new wallet. Also, for privacy reasons you would need to make as many transactions as UTXO you have, which means paying a hefty fee tens or hundreds of time depending how much you use your wallet.
If you transfer your bitcoins to new address provided by existing bitcoin wallet, chances are the altcoin wallet also has a private key to those addresses.
To be safe, you'd have to transfer existing bitcoin funds to completely new wallet. Also, for privacy reasons you would need to make as many transactions as UTXO you have, which means paying a hefty fee tens or hundreds of time depending how much you use your wallet.
Also note that transactions that consume multiple UTXOs on one chain lead to privacy leaks on other chains.
Most of these forks add nothing of value. I don't see forks replacing ICOs at all, as the article suggests - they serve different purposes (besides the fact that both may serve as a pure money grab by unscrupulous parties)
I saw one exchange charge 0.5 btc to list and support new forks but charge 0.1 btc, if it was an ERC-20 Ethereum token
Presumably because it’s less work to support ERC-20 tokens. I don’t think you’d need to run a separate full node for each token.
not only that ERC-20 is a standard, so apis and bots are easy to write on top of them, ever more reason why forks won't replace ICOs
How many of the 19 forks have value now? Other than the famous ones - BCH and Bitcoin Gold - other 17 are not even in the top 100 of coinmarketcap. So the article and the expert are just inflating their claims.
Additionally, there is no need for forks to create value in coins. Coin developers also have tried something called "airdrops" where they assign some coins on a particular criteria. And using bitcoin's blockchain has been one of the favorite criteria.
Additionally, there is no need for forks to create value in coins. Coin developers also have tried something called "airdrops" where they assign some coins on a particular criteria. And using bitcoin's blockchain has been one of the favorite criteria.
While forking as you stated isn't really an issue (if my dog forks Bitcoin, does it really matter?), but it does suggest that people are willing to do it. If we drag out further and further into the year and some of the problems with core Bitcoin aren't resolved, we'll probably see more attempts at forking, and you only need one to cause some chaos.
Each sizable fork adds confusion, though. It might be obvious to you that Bitcoin Cash is not Bitcoin, but new adopters not so much. IN some sense the Bitcoin brand is becoming very diluted.
Each sizable fork adds confusion, though. It might be obvious to you that Bitcoin Cash is not Bitcoin, but new adopters not so much. IN some sense the Bitcoin brand is becoming very diluted.
Again the issue is whether the fork actually gains any credence at all. If your dog can create a fork which has the same amount of influence behind it as Bitcoin Cash, then it will gain credence. Otherwise it doesn't matter if there is a fork.
That said, surely we will see more forks. The Segwit2x was called off but it will be back with additional force. We might see additional 1-2 more forks with credence and re-using the name "Bitcoin" but 50? is just making up numbers.
That said, surely we will see more forks. The Segwit2x was called off but it will be back with additional force. We might see additional 1-2 more forks with credence and re-using the name "Bitcoin" but 50? is just making up numbers.
Anyone possessing the private keys to a Bitcoin balance in the blockchain before each fork automatically owns an equal balance in each forked blockchain.
Which in most cases doesn't really matter since the forked value is pretty much zero (except for the occasional rare ones like BCH)
BCH retained value because it represented a large portion of the community, and the goal was a soft fork rather than a hard fork so quite a few people participated in the switch.
That kind of thing will happen less and less each time a large, informed group of people leave BTC, till all you are left with is a fool's market.
That kind of thing will happen less and less each time a large, informed group of people leave BTC, till all you are left with is a fool's market.
It also helped that the portion of the community BCH represented included the owner of bitcoin.com and a few of the other major sites and services. (Also one of the major mining hardware providers, though I'm not sure how well that worked out - they forced miners to use it for hardware purchases at a time when it was borderline-unusable, which can't have left a good impression.)
This seems bad.
I understand the idealogical reasons for, say, Bitcoin Cash arising as an attempt to bring transaction times and fees crashing down while increasing network capacity to the existing 'currency'. But when it cpmes to creating new currencoes on general, forking the existing blockchain just seems let yet more reward for existing holders, and further disincentive for the new coin to actually be used for anything.
I mean hell, here's another way for your rapidly inflating asset to maybe gain another 10% overnight! Why on earth would you ever spend any of it?
I understand the idealogical reasons for, say, Bitcoin Cash arising as an attempt to bring transaction times and fees crashing down while increasing network capacity to the existing 'currency'. But when it cpmes to creating new currencoes on general, forking the existing blockchain just seems let yet more reward for existing holders, and further disincentive for the new coin to actually be used for anything.
I mean hell, here's another way for your rapidly inflating asset to maybe gain another 10% overnight! Why on earth would you ever spend any of it?
Is there a list somewhere of all the bitcoin forks? The wikipedia one doesn't seem to be up to date...
I use this list https://btcdiv.com/
That being the case, then the present value of Bitcoin is much higher than it would be with no expectation of future forks. It is like holding shares in a company which spins-off a division to increase shareholder value.
Its cool -- the only coins that will survive 2018 will be the ones with segwit, and thus, lightning network support.
Instant, near zero cost bitcoin lightning transactions on the bitcoin network makes all other coins look lame.
This is not science fiction, it is here today. $2 segwit tx to fund the channel, as many tx's for 1 satoshi after that until I exhaust the channel.
Instant, near zero cost bitcoin lightning transactions on the bitcoin network makes all other coins look lame.
This is not science fiction, it is here today. $2 segwit tx to fund the channel, as many tx's for 1 satoshi after that until I exhaust the channel.
Stocks do the same thing, and after the split, the stock's price is determined by the market based on how much the new shares diluted the market. Seems like something very similar will happen here, with the difference being each fork will have a differing value determined by the market's exchange rate between forks?
Edit: I think many are missing the point that a fork and the original BTC blockchain are not of equal value. Maybe a more apt analogy would have been countries in the EU leaving and issuing their own currency.
Edit: I think many are missing the point that a fork and the original BTC blockchain are not of equal value. Maybe a more apt analogy would have been countries in the EU leaving and issuing their own currency.
I think the big difference is that companies can choose to split their stock or spin out new companies, but bitcoin forks can be done by basically anyone.
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Some argue thinking of forks as a stock split is incorrect.
""" Should it be treated as a split of BTC?
That seems incorrect and complicated. If you half the value of your BTC holdings and sell them, you will incur more gains. However, could you determine how much were short-term and long-term? The BCH would also be classed as income at this point, since it now has a value, and so will incur income taxes. Unlike stocks that split, BCH and BTC are separate digital assets that have no common markets, and will have different values going forward. """
https://bitcoin.tax/blog/how-to-tax-bitcoin-cash-bch/
""" Should it be treated as a split of BTC?
That seems incorrect and complicated. If you half the value of your BTC holdings and sell them, you will incur more gains. However, could you determine how much were short-term and long-term? The BCH would also be classed as income at this point, since it now has a value, and so will incur income taxes. Unlike stocks that split, BCH and BTC are separate digital assets that have no common markets, and will have different values going forward. """
https://bitcoin.tax/blog/how-to-tax-bitcoin-cash-bch/
It's funny, that's how things should work, but the crypto space has been so irrational it is not how things have effectively been priced in other splits. For example, Bitcoin Cash's split ended up being free money for consumers, which doesn't make sense in a rational market. Bitcoin Cash split from Bitcoin, but Bitcoin actually maintained value (and went up soon after). I'll wager most of these will have little affect on the price of Bitcoin. Often, the bigger issue is that no exchanges offer pairs for the new Bitcoin forks, so they're basically useless.
Bitcoin Cash added new utility that SegWit lacked: 8 MB blocks, higher capacity, lower on-chain fees. That new utility is new value for Bitcoin holders.
Another fork will add ZKP privacy, new utility and new value.
Another fork will add ZKP privacy, new utility and new value.
To be fair, stock splitting does not result in another entity being spawned (e.g., Apple didn't split into say, Apple and Apple "Cash" like Bitcoin and Bitcoin Cash). So in that sense, it is a bit different.
Companies spin-off like you are describing too. Except the market there is rational, as in, the market cap of the two split companies is equal to the previous market cap of the unsplit company. Look, for example, at Hewlett-Packard over the last 20 years: they spun off Agilent, which itself later spun off Verigy and Keysight, and the HP computer business is split into many parts now: HP, HPE, and DXC.
https://en.wikipedia.org/wiki/Corporate_spin-off
https://en.wikipedia.org/wiki/Corporate_spin-off
Bitcoins are not stocks. Stocks represent claims on actual stuff. Bitcoins represent... nothing.
Except the energy that has been burned in the last 9 years used to create them. The security comes from the need to spend as much energy to 'undo' them.
Where do alts (esp non POW alts) get their value? Because people want to trade them to get more bitcoin, which has value as per above.
You can keep repeating this circa 2014 argument 'not backed blah blah', but as yet it has not gone to 0, and likely never will.
Where do alts (esp non POW alts) get their value? Because people want to trade them to get more bitcoin, which has value as per above.
You can keep repeating this circa 2014 argument 'not backed blah blah', but as yet it has not gone to 0, and likely never will.
Minimum value would be the work/energy needwd to create blocks that enable safe storage and avoid double spending. So there is that.
We use the word fork to describe the act of commandeering the head of the existing BTC blockchain and using your own miners to continue it in a way that diverges from the original chain. This can have a negative effect on the value of both chains due to inverse network effects.
We also use the word fork to describe the act of cloning a branch of code and than adding new commits on top of it to create new software. This is good since more coins increase experimentation and drive innovation and does not in any way effect the existing BTC network or its value (unless you believe we are already in a zero-sum game with cryptos where every new coin reduces BTC).
This article leads with "Some 19 Bitcoin forks came out last year -- but up to 50 more could happen this year" and then completely conflates the two by talking about Litecoin et. al. and Bitcoin Cash interchangeably.
To my knowledge, Bitcoin Cash is the only 'true' fork that survived beyond the splitting of the BTC chain, but please correct me if I'm wrong on that.
It would be scaremongering if I thought it was intentional.