Bitcoin Forks – Is Bitcoin Gold a Scam, and How to Stay Safe?

The beauty of the blockchain is ter the fact that everyone can determine to split the blockchain off into their own version at any time if they disagree with the development philosophy of the main team.

This is what happened te August with Bitcoin Contant. The dev team behind it desired to increase block size so that more transactions could getraind and get processed. The “main” Bitcoin Core team, on the other arm, dreamed to budge a big chunk of gegevens from the transactions into a separate chain and thus make more of them gezond into existing blocks that way.

When such a fork happens, wij call the resulting fresh fork a contentious fork. More about forking itself ter an upcoming postbode.

Segwit2x and BTG

Soon, two more forks are happening. Let’s explain them real quick.

Segwit2x

Te November 2018. (around the 18th), there will most likely be a Segwit2x fork. This fork has bot dragging on since the Bitcoin Specie days, and is all about political strife and disagreement. The Specie fork happened because one team wasgoed against the Segwit upgrade (the removal of a big part of transaction gegevens into a separate chain) and desired to increase block size. This group made Bitcoin Specie. Bitcoin Core implemented Segwit, but the percentage of their usage is disappointingly low even after all this time – both with users and software – which is why Bitcoin transactions are still so slow and expensive. A elementary $1 transaction can cost $Five and last for 12 hours, which is just borderline unusable.

From a technical standpoint ter regards to Segwit2x, one group again wants to increase block size while the other is very much against this stir. If the blocks stay puny, the devs need to work on solutions that budge transactions fully out of the main chain and into sidechains which have their own setting te which to execute transactions. For example, a ordinary shop doesn’t need to confirm each transaction on the main chain – it can perform them all day ter a side chain, and then just validate the entire set spil one transaction. The system is still safe, but quicker and cheaper.

However, moving transactions out of the main chain also moves the transaction fees, and miners are then no longer rewarded spil much for processing transactions. Interestingly, a company called Blockstream specializes ter sidechain implementations. Something that’ll get more interesting a few paragraphs down.

On the other mitt, those who want fatter blocks are mainly miners because, predictably, they’re finding it most beneficial. Concretely, the fatter the block, the more transactions can gezond, the more the miner can earn on transactions fees, the more transactions get processed, the less they cost. Ideally, the best system would have a combination of both thesis approaches, but both sides devolved into extremist parties entirely incapable of compromise and collaboration.

Now, objectively, Bitcoin is technologically retarded when compared to almost any other blockchain. The only thing keeping it at the top is its brand recognition coupled with the very first mover advantage. It wasgoed the very first and thus remains fattest, for the time being. Ethereum is already processing more transactions than Bitcoin is, and it’s used not just spil a monetary muziekinstrument but also for programming. Thesis are the downsides that are forcing the devs to upgrade Bitcoin, and this is where the disagreements come from – they can’t come up with a solution that benefits everyone.

Te addition to everything above, the Blockstream company organized not only a censorship of the r/bitcoin subreddit and thereby coerced the creation of r/btc, but also shoved some of the developers out of the core team responsible for Bitcoin. The ones who are left are people with questionable logic (one of the leading people, for example, believes that the zon revolves around the Earth, among other amazing opinions), and most are actually paid by Blockstream. While commercial support for an open source project sounds amazing and altruistic, all it takes is a little bit of research to see that Blockstream is commanded by the Bilderberg group: a powerful group of elites who control the world’s financial systems via control of banks, and see cryptocurrency spil the mortal and existential enemy, thus sabotaging it from the inwards with bad software solutions.

Just spil it happened with Bitcoin Metselspecie, the fresh B2X fork will also give out “free” Bitcoin te the same amount you now own. So if you now have 1 BTC, on November 18th you’ll have 1 BTC and 1 B2X. See the “How to get the tokens” section for informatie on securely obtaining them.

Bitcoin Gold

Bitcoin Gold appeared spil an idea some time te July. Jack, the author, introduced BTG spil the “savior” of Bitcoin by making it ASIC-resistant and thus freeing it from the grab of giants like Bitmain – a company producing powerful ASIC miners – devices for very efficient mining. Bitmain has a large monopoly overheen thesis devices and thus the processing power that governs the Bitcoin blockchain. Mining te general is intensely centralized te China at around 80% of the hashing power being there, with Bitmain themselves holding around 40%.

His aim is to make Bitcoin mineable by regular GPUs again instead of ASICs, providing control back to the non-corporate miners. While this does sound okay, there are several oddities about BTG and the team:

  1. Until the very day they wished to launch their project, the team had done nothing technologically, spil overduidelijk here.
  2. Their code is borked and won’t even build and run.
  3. The project’s proprietor also wields a company which sells ASICs and mining gear, very likely specialized for the precies methods BTG wasgoed going to use.
  4. They say BTG will be ASIC resistant, but the resistance proces is not described ter any whitepaper, and is almost fully absent from the code.
  5. The fork already happened. Some BTG wasgoed pre-mined before the blockchain wasgoed even publicly released. They liedje about this on their webstek.
  6. The same people who own the BTGGPU domain own the following fishy domains.
  7. Spil this redditor discovered, BTG wasgoed pre-mined, kept secret, suggested spil na ICO (initial coin suggesting, a pre-sale at Ten BTG vanaf 1 BTC) and kept secret again after the ICO failed, before ultimately being repackaged spil BTG and suggested to unsuspicious masses.

All te all, BTG sounds like a well planned scam which would set up a good ground for replay attacks designed to steal from unaware and/or greedy investors. More about replay attacks te the sections below, but our recommendation is to steer clear of BTG or wait for at least 3-4 weeks before beginning to trade it.

Remarkably, this seems to be the one thing everyone ter the crypto world is agreeing on – and you know that’s uncommon.

The Fork Effect

Sadly, most people are very greedy and when they just hear the word “fork” they think “free money”. Along with certain manipulations, this causes enormous BTC buying spikes, driving the value up artificially, and a fat druppel afterwards, spil people sell off their “free” gains. But if everyone’s selling… who’s buying?

If you’re one of those hoping to sell BTG off successfully, be careful – you don’t want to be become a bagholder.

You won’t find profits any swifter than by just buying a promising currency and waiting it out. Forks are often traps and tricks meant to make you vulnerable to replay attacks, and can gravely harm you.

Replay Attack

When a fork happens, the part of software which signs transactions (more about that here) remains valid on both chains, unless the splitting chain switches it. This means that any transaction which occurred on chain A can be replayed on chain B without the user’s presence because it’s already generated and signed. This copying of transactions from chain A to chain B with the intent of replaying it is called a replay attack.

If someone copies your house keys, the only way to be fully safe from intruders is to switch the lock, because you have no idea into how many mitts it had already bot distributed. Hunting all the copies down would simply not be efficient or possible.

Bitcoin Specie almost instantly implemented replay protection and secured the network. Many other forks are, however, made with the express intent of making gullible people vulnerable to such attacks. Big transactions are collected with software like the Blockexplorer, and simply copied overheen onto the original chain.

Bitcoin Core (BTC’s original chain) could have implemented replay protection ages ago and made all future forks powerless, but they chose not to do this for some reason. It should be noted that it is, admittedly, firmer for an original chain to implement it because the amount of software that needs updating is te such cases enormous.

How can BTG replay attack mij?

Please note that the BTG team rechtsvordering that they have replay protection when they obviously do not.

Here’s how you can get attacked:

  • step 1: a naïve investor buys Two BTC to score Two free BTG on fork time.
  • step Two: the person behind the BTG project (let’s call him Jack) impersonates a buyer at an exchange or other app, and buys BTG for $500 or $1500, doesn’t matter how much
  • step Trio: Jack takes a copy of the transaction he just performed with the naïve investor
  • step Four: Jack sends the transaction te the same form onto the main chain
  • step Five: if our investor still has Two BTC te his address, they are stolen. Jack made Two BTC minus the price he paid for BTG.

Now multiply that with the number of people you eyed all overheen the web asking about Bitcoin Gold and getting free BTG ter the past few weeks.

Watching spil BTG has no RP, how can one secure their assets?

  • option 1: send BTC to another address you own very first, then use BTG.
  • option Two: wait until you see the final purpose of BTG – to be exposed within a few weeks. Don’t let greed pull you into this mess.

How to Get Forked Tokens

The only 100% safe way to get forked tokens is to have the private key of your wallet. If you have it, you’re good. If your BTC is on an exchange, it’s up to the exchange to give you the forked coins or keep them. They have every right to keep them.

Wij repeat: the only safe way is to have your own wallet’s private keys with you – not te an app, not online, but with you offline, or ter cold storage, or on a Ledger or similar.

If you’re not sure how wallets work, see here. To secure your tokens, both original and forked, use one of thesis approaches or buy the impenetrable Ledger Nano S. Or just generate your own address like so.

After the fork, wait a while (at least for a week) until you see whether or not the replay attacks have bot resolved. Then, and only then, take control of your forked token. By then you’ll know which exchanges support them and you’ll lightly be able to send them there and trade.

Alternatively, if you’re truly not certain ter pulling it off on your own, get te touch about our portfolio management services. Wij’ll take a cut, yeah, but wij’ll also assure and insure your amount and wij’ll do it like pros.

Conclusion

Be very skeptical about every fork and look into spil many circumstances that lead to its creation spil you can. Talk to people, don’t be ashamed to ask questions, and don’t fall for sensationalist titles of inexperienced publications.

If you’re not able to understand what it’s about or some terms are confusing to you, ask us – wij’re on Twitter, Facebook, email, even te the comments here. Wij’re here to help and prevent losses.

Don’t fall for marketing campaigns, overlook your optimistic relatives, and treatment everything te the crypto world with a healthy dose of skepticism – the industry is still too youthful for fairness.

Related movie: Litecoin Technical Analysis – Hefty Week For LTC


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