What is a Bitcoin Fork? Will your Bitcoin Have the Same Value After the Change?

What is a Bitcoin Fork? Explained in Simple Terms.

There are broadly two types/versions of "fork" in the current discussion.

Take a software fork (soft fork) in Github for example, you can fork someone's project and modify it according to your wishes and it will not change the original project because you have created a copy of it and experimenting on that copy. A similar thing happened before when Gavin and Mike took the Bitcoin-core code, made a few changes and published it as Bitcoin XT.

A hard fork is when everyone involved in cryptocurrency HAS and is FORCED to update to the same newest version in order to keep using it. If people refuse to update, they will end up with an older, incompatible version.

Confused? Let me clear up with an example.

Suppose you have a wallet with 10 BTC. If a hard fork happened and both the old and the new crypto currencies survive the fork, you will have 10 units of currency on each chain. Now, these currencies can be called as BTC and BCC which are the names being thrown around.

From someone who has nothing to do with code, what's important to note is that it's not just BTC anymore. There are now two different chains BTC-old (BTC) and BTC-new (BCC? consensus on the new name is yet to come to a decision). The value of each currency will flucuate independently and wildly.

This is what happened before with Ethereum, where some members refused to go with hard fork. The majority of people who agreed to the new fork upgraded and continued with what they called ETH, the rest (people who refused) continued to use what they called Ethereum Classic (ETC). The current Value of ETC is $14.71 while that of newer upgraded version ETH is $202.91

A similar thing is now happening with the Bitcoin as we know it. From the past examples, it's always a good choice to go with the new version, but will past repeat itself? No one knows the answer to it.

I have 1 BTC on X Wallet right now, what will happen in the future?

Theoretically and based on past examples you'll have your 1 "BTC" on both chains, so whichever chain will be known as "Bitcoin" in the future usually the one which is most popularly used and holds the most value, you will have 1 of it, you will also have 1 of the other kind of coin if both chains survive. But, this depends on your Wallet provider entirely, ask them if they will have both Right Now. In short, if both chains survive, like the example with Etherium above, you should end up with more money. It won't really "double" the value of your current Bitcoin holdings though because when a fork happens the market value of coins (both old and new) will likely fluctuate rapidly as people try to find out what the new currencies are worth. 

What to Do Before and After a Hard Fork?

Two things:

1. If you directly have control over the private keys to your bitcoins, you're absolutely fine. Your coins aren't going anywhere or being invalidated or getting worthless. If and When the hard fork does happen, you have to make a decision on which chain you want to end up using like I mentioned above. Protip: Just Hold until the prices stabilize to minimize risks or you can get risky and lucky and end up making big bucks, the choice is yours.

2. If you have no control over your private keys to your bitcoins (example. on an exchange like Coinbase, Kraken, Bitstamp), move them to an address that you control Right Now. If you don't, whoever controls your bitcoins (the exchange site) will end up deciding for you and for all their clients what side they will support and they won't necessarily support both sides of the coin. Coinbase has released a statement just 6 hours ago that they will not be supporting the new Bitcoin version (Bitcoin Cash) if we can learn from the Etherium split the new version ended up being 10 times more valuable than the old one. The time to make a decision is now! Personlly I've moved to Electrum. It allows you access to the private keys, which is the key that will be accessible on both networks.