Although it hasn't happened before, and it is very undesirable, it is possible for Bitcoin to split into two non-negligible separate currencies.

Why is this possible? / What causes a split?

There is no actual BTC in your Bitcoin wallet: there are only private keys which are used to unlock and then transfer ownership of BTC stored in the Bitcoin system. BTC never actually leaves the Bitcoin system. A split creates a clone of the original cryptocurrency, but with modifications preventing the two cryptocurrencies from actually being the same; after the split, you cannot send coins from one side of the split to the other. After the split, your private key can be used to unlock your coins on both the original system and the modified system.

It's like if someone got their hands on a copy of the google.com database and created super-google.com starting with the google.com database but with different features. You could use the same login credentials to login at either google.com or super-google.com. But after the clone was created, if you received mail.google.com email, it would not show up at mail.super-google.com, and vice-versa. Similarly, you can use the same private key to spend money on the original currency or the modified currency, but after the split they diverge.

Anyone can create a split. It only requires a few lines of code changes. But splits only matter if people of economic significance actually use the split (ie. they must run the modified software).

Splits happen in the following situations:

- In a contentious hardfork.
- In a user-activated softfork (UASF) which lacks both majority mining power at the time of activation and near-unanimous support from the economy. If it has one or the other, then a split does not result.
- In a BIP9-style miner-triggered softfork where a very large number of miners are lying about their enforcement of the softfork. (Unlikely.)

What happens to my bitcoins in a split?

It's similar to a stock spin-off. You have x BTC beforehand, and afterward you have both x BTC and x "BTC-X". But very importantly, your wallet will not magically know that it is now able to unlock both currencies. If your wallet is not updated to account for the split, then you will only be able to spend one of the currencies, probably the more "status-quo" one. Another possibility is that your wallet could be updated, but only to support a different currency than it would've otherwise, not to support both. It is not unreasonable for wallets to support only one currency, since they really weren't originally designed/intended to support multiple. But if your wallet only supports one of the currencies, then you will usually end up throwing away some or all of the other currency when you next send coins after the split, as a side-effect of the transaction -- this is called "replay".

Value is unpredictable. Like a stock split or spin-off, you'd vaguely expect the value of BTC immediately before the split to equal the sum of the values of "BTC" and "BTC-X" immediately after the split. But if a split like this is anything close to a 50-50 split (in relation to economic adoption/value, not node or miner adoption), then the whole thing will probably be unbelievably, catastrophically messy, which may result in the combined value crashing. On the other hand, if the minority currency is pretty small and things don't get too messy, the minority side could be speculatively overvalued (similar to altcoins) without affecting the majority side too much, causing the combined value to rise somewhat.

Which side of the split is the real Bitcoin?

That depends on a wide variety of factors, and to some degree it is subjective. The most important factor is which currency people/businesses/exchanges accept: if for example one currency is accepted by 95% of the pre-split economy, and the other is accepted by only 5% of the pre-split economy, then the 95% one is probably truly Bitcoin, and the other one can be considered a Bitcoin-derived altcoin. Note that mining power has very little influence here.

Some might say that both currencies post-split are valid incarnations of Bitcoin, but it is my philosophy that only one Bitcoin can exist at any one time; any uncertainty is only a temporary feature, and at least in hindsight there will be a single unbroken path from Satoshi's original Bitcoin to the current one.

What should I do to secure my bitcoins?

First of all, remove all bitcoins possible from banks/exchanges/"hosted wallets". If you can't export your private keys, then you don't actually control the bitcoins. This is a good idea in general, but it's especially important in case of splits. If you're using a Bitcoin bank, then you will have no control over what happens to your coins. Quite possibly, the bank will end up stealing/losing one of the currencies that you should have access to, either through greed/malice or technical incompetence, and the currency they throw away might well be the only one that ends up having any long-term value.

Possible splits are usually predictable some time in advance (see the next section). If in doubt, avoid sending transactions or trusting received transactions 12 hours before and up to a few days after the split time, and check the forum for more news. If a major split happens, I will very likely make a post and news item explaining how to handle the situation. Coins at rest are not at risk.

Generally, after a split:

- If you want to completely ignore (ie. discard) one of the currencies, and your wallet is already set up to ignore that currency, then you don't have to do anything.
- If you want to completely ignore (ie. discard) one of the currencies, and your wallet is set up to support only that currency, then you might be able to change the software's settings after the split, or you might have to switch to different wallet software.
- If you want to use both currencies at the same time or sell one of the currencies, then you will probably have to follow a somewhat-complicated series of steps possibly involving running some extra software in order to cleanly split your coins and eliminate the possibility of replay.

What are SegWit, BIP148, UASFs, and "UAHF", and how do they relate to this? / When might a split happen?

SegWit is a set of changes to Bitcoin which increases the max block size, among other improvements. Under its initial BIP141/BIP9 deployment plan, there is almost no chance of a split.

A user-activated softfork (UASF) is a general method of deploying softforks (like SegWit). UASFs have been done in the past, both by Satoshi and after Satoshi left. Unlike the BIP9 deployment method originally planned for SegWit, a UASF does not require any miner cooperation. A UASF can fail, but only through insufficient economic adoption, not by any miner action. However, splits are more likely with UASFs than with BIP9 deployments, especially when the UASF is done on a compressed schedule. (For ideally-low split risk, a UASF would take about a year to activate.)

BIP148 is one specific UASF. It is intended to activate SegWit. It activates and may cause a split on August 1. If it succeeds economically, it will activate SegWit by November.

The large Bitcoin miner Bitmain announced that they might engage in a (nonsensically-named) "user activated hardfork" ("UAHF" shortly after BIP148 activates if BIP148 has any success. This would definitely cause an additional split, resulting in up to three currencies: BIP148-Bitcoin, Bitmain-coin, and (depending on the degree of BIP148's success) status-quo-Bitcoin. As mentioned previously, if you have x BTC before the split, you'll be technically able to claim x of all three of these currencies after the split.

The next time when a split is predicted to possibly happen is therefore August 1, 2017 at midnight UTC.

OK wallets

The following wallets give you some theoretical way of exporting your private keys, so they should be safe to hold BTC during Aug 1. Depending on what happens after Aug 1, you may have to export your private keys and use different software, though. (Do not go doing this willy-nilly in a panic, though -- wait for agreement and clear instructions from several sources. There will be no rush.)

The ones in bold are ones that I also tend to like for other reasons. The ones in italic seem to make it difficult to export your private keys, or I particularly dislike them for other reasons.

Mobile
Electrum
Mycelium
Copay
Bitcoin Wallet for Android
breadwallet
Simple Bitcoin Wallet
Bither
ArcBit
Coin.Space

Desktop
Bitcoin Core
Electrum
Bitcoin Knots
mSIGNA
Armory
Bither
ArcBit
Copay

Hardware
Ledger
Trezor
Digital Bitbox
KeepKey

Web
Green Address*
Coin.Space

* Note for Green Address: You must either use a 2of3 account or have nLockTime transactions emailed to you in the settings. Otherwise you're trusting Green Address too much.

https://bitcointalk.org/index.php?topic=2012799.0

There is some chance that BIP148 will result in an economic split of the Bitcoin currency at midnight UTC on Aug 1. If this split is non-negligible, then action may be required by all Bitcoin users. Personally, I consider it most likely that the split will be negligible and that you won't have to do anything, but it's still a good idea to prepare just in case.

A very short summary of what you need to do:

1. Ensure that you have no BTC deposited with a Bitcoin bank or other trusted third-party before Aug 1. If there's no technical way for you to export the private keys for your BTC, then that BTC is at risk. Some Bitcoin banks may assure you that they'll definitely keep your BTC safe, but I absolutely wouldn't trust them.

2. Do not send transactions or trust received transactions starting 12 hours before Aug 1 at midnight UTC, and continue this until you hear the "all clear" from several trustworthy sources. For example, I will post a forum news item if everything is OK, or if everything is not OK and action is required.

Bitcoin is on the road to increasing its capacity – but it's not there yet.

Despite the claim bitcoin has been upgraded to support Segregated Witness-style transactions, there are more steps that need to occur before its distributed network can process additional data.

In fact, due to the complexities of keeping bitcoin's distributed network in unison, the change might not take hold until late August.

The timeline

That said, with BIP 91 activated, bitcoin is now headed down a path toward that possible outcome.

In context, this means that BIP 148, a proposal that seeks to upgrade the network to SegWit using different code, is no longer likely (though it's still possible). As such, one avenue that would find bitcoin splitting into two blockchains has been diminished, though it would be wrong to say it has been eliminated entirely – even in the short term.

Rather, SegWit now needs to follow a timeline designed to give miners and node operators ample time to upgrade their software, one that must also operate within the larger constraints of bitcoin's design.

Here's a best-case scenario of how this might unfold:

As illustrated below, miners must now signal support for SegWit until the code achieves "lock in" and "activation," two separate milestones with unique requirements.

Short-term complications

Still, things could go awry.

For example, it's possible that bitcoin's miners could stop signaling support for SegWit ahead of the BIP 141 "lock in" deadline (although they'd risk having their blocks rejected by the network, losing the rewards).

While all nodes appear to be signaling correctly, it's hard to know exactly who is running the software – this means that miners could fail to reject a block that wasn't signaling for SegWit, continue adding new blocks on top of that block, and ultimately, produce an alternative chain.

Adding to the argument is that miner support for the idea has notably wavered in the past, with some asserting it's largely the threat that users could push through a change that could lead to a split that has kept miners in check.

Litecoin's attempts at integrating SegWit adds context to this theory.

As much as 75% of litecoin's mining hashrate, for instance, was signaling for SegWit in April, meaning it reached the necessary threshold to lock in SegWit. But miner support dropped off soon after. This sparked protocol creator Charlie Lee and other litecoin users to threaten to code an alternative user-activated soft fork (UASF) proposal.

Shortly thereafter, a roundtable was held that united major miners, at which time they agreed to signal support for SegWit.

Should similar psychology come into play here, the idea is that (after averting a UASF on bitcoin on August 1), miner support for SegWit may wane, though the economic stakes here are arguably higher.

Long-term complications

But even if SegWit passes, that still only enacts one-half of the Segwit2x proposal.

An informal agreement among businesses and miners reached in May, the goal of the initiative was to push the capabilities of the software even further (some would argue too far beyond what should be advocated by prudent development).

As developer Jeff Garzik put forward in an interview this weekend, he still plans to help push forward an effort that would seek to upgrade the block size to 2MB, and to enact the upgrade via a process known as a hard fork.

The argument against that approach is that research in this area is still underdeveloped, though Garzik has argued SegWit could fail to introduce the capacity changes promised by those who have championed its integration.

This determination (as well as the acrimony Garzik's outlook has caused in the developer community that argue this claim and others he's made are false) could make a split later in the year more likely.

And it's quite possible this chart will become more complex as this date approaches and different groups attempt to influence the outcome.

Please I'm a newbie. I join crypto currency just few fees ago. I have my little btc with Spectrocoin and Luno wallet. Is it safe there or not?

With the imminent split of bitcoin Blockchain, you will only get the version of bitcoin your wallet provider decides.

Some providers like CoinBase has issued a statement on they one they will support and urge users who desires something else to move their Bitcoin somewhere else. I think that's professionalism.

If your wallet provider have not issued a statement, you could ask them, alternatively move to somewhere safer.

Wolexyoshi:
Please I'm a newbie. I join crypto currency just few fees ago. I have my little btc with Spectrocoin and Luno wallet. Is it safe there or not?

amjustme2:
With the imminent split of bitcoin Blockchain, you will only get the version of bitcoin your wallet provider decides.

Some providers like CoinBase has issued a statement on they one they will support and urge users who desires something else to move their Bitcoin somewhere else. I think that's professionalism.

If your wallet provider have not issued a statement, you could ask them, alternatively move to somewhere safer.

what of blockchain.info, is it safe?

Yes of you had backup your pass phrase. You you did not, better do it now.

Make you you write it out with pen and paper, keep somewhere safe.

But still, if you have invested "alot" buy a hardware Wallet, if you can, get a mobile wallet,

Check my previous post for examples.

owunabastard:

what of blockchain.info, is it safe?

This updated Calendar (pictured below) from a Good friend is worth keeping handy.

amjustme2:
This updated Calendar (pictured below) from a Good friend is worth keeping handy.

I use coinomi mobile wallet and I have some Bitcoin investments all over. Do u suggest I withdraw to my mobile wallet alone or withdraw to the wallet and exchange to naira before Aug 1st?

It's likely you did not read this post from the beginning. Maybe because it's a bit lengthy.

I am recommending you should.

tbliss22:


I use coinomi mobile wallet and I have some Bitcoin investments all over. Do u suggest I withdraw to my mobile wallet alone or withdraw to the wallet and exchange to naira before Aug 1st?

Fear Not The Fork But The Fear Itself: Bitcoin Wisdom

There is no denying that the initial fear of the Aug. 1 fork, which was quelled with BIP 91, and the Bitcoin Cash potential fork are playing havoc with Bitcoin price. However, the bark could well be worse than the bite when it comes to currency forks, if history is anything to go on.

A cryptocurrency fork sounds like something new, and something that can only affect digital currencies because of a technical ‘fork’ of the Blockchain. But this is not entirely true, currency forks have been seen since the 1960s, and they have been seen on currencies as big as the US dollar.

That forking US dollar
In 1963, and again in 1971, the US dollar forked. It existed in two incompatible forms, yet the effect of this fork was not nearly as catastrophic as you would imagine.

The 1962 fork came about when the US passed the Interest Equalization Tax for purchases of foreign securities by taxpayers. As such, in London, the banks created the ‘Eurodollar’ for dollar deposits outside of the US banking system, and this meant that they avoided the tax.

Essentially, another group took a currency and made their own version that was not supported by the originals makers of it. The effect of these two currencies was when the banking sector was booming, the bank-based Eurodollar had a lower interest rate, however, if the banks went through trouble the Eurodollars interest rates skyrocketed as there were fears that the banks might not be able to redeem deposits.

Not the end of the world
These forks and many other smaller ones on the dollar, of course, have not seen the currency abandoned. In fact, the Eurodollar fork actually aided the US dollar at times, strengthening the original currency when the Eurodollar became unstable in certain circumstances.

In the new and uncertain world of cryptocurrencies, the fear is, of course, more linked to the fact that Bitcoin could drop to zero. It is a legitimate fear, but again, it is not something that is unique to digital currencies.

Currency evaporation happens
Across the last century, the GB Pound has depreciated by 98 percent, the US dollar by 95 percent, and the best performer against this hyper inflation over a century is the Swiss Franc at 75 percent depreciation.

However, 95 percent over 100 years is only a three percent loss per year. The reasons for this fall in value is hyperinflation, government defaults or expropriation or war. But the reason they are still used and function is because people can use them today, not because they have faith in their long-term survival.

Bitcoin has protection
The contributing factors that are driving currencies towards being valueless are absent from Bitcoin. The only thing it could do with is some sort of authoritative stamp of approval.

So, can Bitcoin follow the trend and have a three percent chance of dropping to zero? Even if it had a 10 percent chance of becoming valueless this year, it would put it on par with the average currency.

Zimbabwe's currency has nearly disappeared due to government actions, Venezuela is about to fall off the map due to civil unrest. These factors cannot affect Bitcoin.

Well designed digital currencies almost have a better chance of survival or at least being bought out at a high value, then the average fiat currency.

https://cointelegraph.com/news/fear-not-the-fork-but-the-fear-itself-bitcoin-wisdom

CryptoCoinr:


Why didn't you post a link to the source of your OP?

-

https://bitcointalk.org/index.php?topic=2012799.0

I just noticed it was not.

CryptoCoinr:


Why didn't you post a link to the source of your OP?