The following post by cashassociation is being replicated because some comments within the post(but not the post itself) have been openly removed.
The original post can be found(in censored form) at this link:
np.reddit.com/r/ btc/comments/9wthuv
The original post's content was as follows:
BCH November 15th Forking Guide
Intro
As you may have heard, on 15th November 2018 the Bitcoin Cash Blockchain will fork into at least two separate chains. We felt it our duty to provide information to the community on the situation that we hope will offer some clarity on this rather complex situation.
What Is A Fork?
A fork occurs when at least one group of miners decide to follow a separate set of rules from the current consensus protocol. Due to the way bitcoin is designed, these miners will then operate on a separate network from the current network. This was in fact how Bitcoin Core and Bitcoin Cash was created from the original Bitcoin. Both changed the consensus rules in different ways that made them incompatible.
To make the current situation slightly more complex, there are to be two sets of miners that are changing the protocol rules away from the current protocol. It is not expected that the currently operating consensus rules will be in operation by any significant set of miners after November 15th. This means that after November 15th there will be two new sets of competing protocol rules. For simplicity these will be described as the BitcoinABC ruleset and the BitcoinSV ruleset (although other implementations such as Bitcoin Unlimited, bcash, bchd, BitcoinXT and bitprim all also have the ABC consensus ruleset).
This is quite a unique fork situation as one side (BitcoinSV) has indicated that they will be willing to attack their competition (BitcoinABC) using reorgs and doublespends to destabilise and reduce confidence in it.
BitcoinABC Fork Details
The main new features in the BitcoinABC that make it incompatible with the current protocol are CTOR and DSV.
To summarise:
CTOR (Canonical Transaction Ordering) is a technology that allows blocks to be transmitted in a much more efficient way. This means that as blocks become larger as the network gains more adoption, the hardware and bandwidth requirements on nodes is decreased. This reduces centralisation pressures and allows us to scale the network with fewer adverse effects. You can read more about CTOR in this excellent ARTICLE by u/markblundeberg.
DSV (CheckDataSigVerify) is a technology that allows oracles directly on the Bitcoin blockchain. This means that the transactions on the Bitcoin blockchain can be dependent on actions that happen in the real world. For example you could bet on the weather tomorrow, or if a specific candidate wins an election, all directly on the blockchain. You can read more about DSV at this excellent ARTICLE by u/mengerian.
BitcoinSV Fork Details
The main new features in the BitcoinSV that make it incompatible with the current protocol are an increase in the default block size limit to 128MB, increase of the 201 opcode limit within Bitcoin’s script system to a maximum of 500 opcodes, and a new set of opcodes including; OP_MUL, OP_LSHIFT, OP_RSHIFT, OP_INVERT.
The increase in the default block size limit will in theory allow miners on the BitcoinSV ruleset to produce and propagate blocks up to 128MB in size. It may be the case that the current state of the network cannot handle, or at least sustain, 128MB blocks but this will allow miners to decide if they want to try and produce blocks over 32MB (the current protocol limit agreed upon by miners).
Increasing the opcode limit will allow miners to make transactions using scripts of larger lengths. This means that more complex scripts can be developed.
The new opcodes allow new operations to happen within the Bitcoin scripting system.
What Are Your Options?
When the fork happens your coins will become available on both chains. This is because both chains will share the same blockchain history up until the point the fork occurs. Things are unfortunately not quite as simple as that (when are they ever in cryptoland?). Transactions that would be valid on both chains will occur on both chains. Your transactions will be considered valid on both chains as long as you do not use any of the exclusive features from either ruleset, or use inputs from transactions that are considered invalid on one of the chains. You can alternatively split your coins so that you can control them exclusively on each chain.
So what should you do? We won’t recommend what you should do with your own money, and this is not financial advice, but here are some of your options.
Do Nothing and HODL
The simplest option is to keep your Bitcoin Cash in a wallet you control and wait for things to blow over. Make sure you have the private keys and or the seed written down in at least one place to be able to recover your funds if needed. As long as you do not move your funds they will be available on both chains after the fork.
Risks - Price volatility. Like always the price can go up and down any amount. Only risk what you can afford to lose.
Sell BCH for Fiat
Another simple option is to sell your BCH for fiat. This means moving your Bitcoin Cash to an exchange such as Bitstamp.net, Kraken.com or Coinbase, and then selling them for a fiat currency. You may also consider then withdrawing your funds to your bank account for extra security (exchanges have been known to implode with everyone’s funds every now and again).
Risks - If the BCH price increase while you hold fiat your BCH holdings will be less if and when you buy back. Exchanges and banks can confiscate your money if they like (that why love Bitcoin remember). By selling you may also be liable for taxes in your jurisdiction.
Split Your Coins and HODL
If you want to be ready for anything then you can split your coins after the fork occurs. This means that you will be able to control your coins exclusively on each chain. You will still need to make sure you have your wallet(s) backed up and have the private keys and seeds written down somewhere.
To split your coins you can use a tool developed on Electron Cash HERE. This is unfortunately not a simple tool to use right now. Make sure to read the tips and advice given in that thread.
Risks - This has the same risks as simply HODLing your BCH. You should also be aware that some services have decided to refuse to use split coins during the fork. This means that if you send them split coins they will not allow you to spend them. These services include: Yours.org, moneybutton, HandCash, CentBee and CoinText.
Split Your Coins and Sell Some
If you interested in gambling on which chain will be more successful you can split your coins using the method above, and can then send coins from either chain to an exchange that allows buying and selling of specific sides of the chain. Most exchanges have decided to close deposits and withdrawals of BCH and even trading of BCH until the outcome of the forks have become more clear. After the fork occurs exchanges will likely make announcements about whether which chain they will support (potentially both), and you will then be able to trade each fork as separate cryptocurrencies.
Risks - By selling your coins on one of the chains you will no longer be invested in that side of the fork. In the case that one side of the fork ceases to exist and you are only holding coins on that side, you will have lost that money. By selling you may also be liable for taxes in your jurisdiction.
Summary
It is unfortunate that Bitcoin Cash has to go through a fork without unanimous consensus on the new protocol rules. The unique situation with this fork, in particular, has presented some interesting new issues, and it is likely that we as a community will learn a lot from it.
We hope that in similar situations in the future that the major entities in the industry, including miners, developers, businesses and community leaders can come together to find compromise that keeps the ecosystem stable and focused on adoption.
If you have further questions about this or just want to discuss the fork in general, we encourage you to join our chat at bitcoincashers.org/chat and join the conversation.
No comments:
Post a Comment