What is a Bitcoin fork? Segwit2X is another hard fork on mid november 2017. what to do before the fork happens?
There has been significant news coverage and developments in recent weeks about changes to digital currency networks particularly the upcoming Segwit2X. These are sometimes called “forks”. We wanted to provide a simple, non-technical explanation to add context to recent discussions.
What is a Segwit or “fork”?
A “fork” is a change to the software of the digital currency that creates two separate versions of the blockchain with a shared history.
Forks can be temporary, lasting for a few minutes, or can be a permanent split in the network creating two separate versions of the blockchain. When this happens, two different digital currencies are also created.
Preparing for the Bitcoin User Activated Soft Fork
On August 1, the Bitcoin User Activated Soft Fork (UASF) was activated. Creating 2 coins, the Bitcoin Core (BTC) and the Bitcoin Cash (BCH)
The User Activated Hard Fork (UAHF) was proposed to increase the Bitcoin block size and create a separate blockchain. This change is incompatible with the current Bitcoin ruleset and is different from the User Activated Soft Fork (UASF).
The UASF was intended to address scaling issues faced by the Bitcoin network by accelerating the adoption of Segregated Witness.
The activation of UASF created two blockchains. The outcomes:
Why are changes made to digital currency protocols like Bitcoin and Ethereum?
Each of these digital currencies use open-source software protocols with independent development teams responsible for changes and improvements to the network, much in the same way that changes to internet protocols allow web browsing to become better over time. Same with your Mobile devices with their proposed software updates.
Our mission is to create an open financial system for the world and we believe digital currencies will be fundamental in achieving this mission. However, many of these digital currencies are still in early development. Making improvements to the software — such as the number of transactions the network can support — is crucial to creating finance 2.0.
Why do forks happen?
There are a few reasons why a fork can happen. For example, when a change is proposed to a digital currency protocol, users need to show their support for the new version and upgrade — in a similar way to people regularly update applications on their computer. In order for these changes to get approved many people need to agree, just as changes to cellphone networks require many phone companies to agree.
What does this mean if I have digital currency stored on other platform and exchangers that doesn't support the fork?
Timeline and Support — Bitcoin Segwit2x and Bitcoin Gold
The Bitcoin Segwit2x fork is projected to take place on November 16th and will temporarily result in two bitcoin blockchains. Following the fork, Coinbase will continue referring to the current bitcoin blockchain as Bitcoin (BTC) and the forked blockchain as Bitcoin2x (B2X).
Any customer with a BTC balance on Coinbase at the time of the fork will be credited with an equal amount of the B2X asset on the Bitcoin2x blockchain. No action is required — we will automatically credit your account. So, if you have 5 BTC stored on Coinbase before the fork; you will have 5 BTC and 5 B2X following the event.
For more information about Bitcoin2x please see our Update page.
The Bitcoin Gold fork took place on October 23rd. Information about this fork has been limited and there are concerns about its security and stability. As a result, we do not believe it is safe to allow support for Bitcoin Gold at this time. If the blockchain proves to be secure and valuable, Coinbase may choose to support it. At that point, your account will be credited with an amount of Bitcoin Gold equal to your Bitcoin (BTC) balance at the time of the fork.
Over the coming weeks, we will keep our community informed about these events through our blog, Update page and status page in Facebook.
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