March 23, 2017 Bitcoin Unlimited is signaling activation in the last 38.3% of recent blocks. A Worldwide hard fork could take place at any time. Everyone using Bitcoins could be affected.
Bitcoin prices are fluctuating while actions are being made which will lead to an impending hard fork dividing the Bitcoin community. CoinIdol investigates the two contentious sides to understand what are the risks and if Bitcoin holders should be concerned about their situation.
This week has seen Bitcoin price drop a record 16 percent to $926, and then recover to $1,115 in a matter of days. Bitcoin Unlimited has undergone two denial of service attacks in a little over a week due to faults in the software.
Exchanges have warned users about possible issues if the fork is indeed implemented. The wallet service Circle has alerted users on Monday that they should consider selling their bitcoins. Circle suggested that users convert their balance to a non-crypto currency as "the only way to avoid the potential negative consequences of a bitcoin fork" taken from their updated User Agreement on their website:
“The only way to avoid the potential negative consequences of a bitcoin fork is to not hold bitcoin. Just go to Settings > Currency and convert your balance to dollars, pounds or euro (availability is based on where you live). You'll then be able to hold those funds with Circle or cash out instantly."
Coinidol.com has reached out to experts in order to determine whether a fork is a serious possibility, or an attempt to knock down the BTC price on a short term basis.
Blockchain researcher of Life Liberty Trail Tone Vays does not expect a fork, but warns that it could lead to serious issues in Bitcoin's future. Vays said:
"Either BTU is bluffing, or they are idiots and will hard fork. If they do and BTU survives in a viable way longer than three months, where the price of BTU is greater than one tenth of BTC, then not only will Bitcoin die as a revolutionary technology, the entire crypto space is done. That is why I do not expect a fork, or within three months the BTU chain will be like the Clams HF of Bitcoin. What has given Bitcoin value is the fact that it cannot fork into two, and the reason it's over $1,000 is the expectation that it still won't split"
In the hypothetical fork scenario, Vays underlines the issues of trust and security, considering the fact that top mining pools are currently mostly controlled by the Chinese.
"If BTU forks and BTC chains die, then BTU would become BTC and we are back to one Bitcoin. In that scenario, anyone 'smart' who has ever programmed Bitcoin will no longer be involved, and it will either be programmed by the Chinese Government, in which case no one would trust it, or incompetent developers with a similar skill set to those that programmed TheDAO. I will be addressing this issue further on my podcast and YouTube Channel," he announced.
“Please look at what happened with Ethereum. We're likely going to have 2 viable chains, so you'll double your money. "double" your money… You may have to get your coins off of exchanges that won't credit you for both chains.”
Advised Board Member of the Dutch Bitcoin Foundation.
The digital Decentralized Autonomous Organization, imagined as an investor-directed venture capital fund on the Ethereum blockchain, was hard-forked in the summer of 2016 because of a hacker attack that endangered a third of the DAO-s funds. In order to reverse the hack and restore the funds, the Ethereum community hard-forked the blockchain therefore breaking Ethereum into two crypto currencies and creating Ethereum Classic.
On the other hand, former lead Developer of Steem and Bitshares Daniel Larimer explains to CoinIdol that scaling is something that will eventually determine Bitcoin's long term success.
“I think a fork like Ethereum Classic is the worst possible outcome in the short term, but probably the best outcome in the long term. The free market will determine the winner, even if it is messy. As far as manipulation claims, I do not follow the day to day politics of the bitcoin market. I am too busy building the future. Bitcoin’s long term success will depend upon scaling to meet demand. If Bitcoin remains at 1MB blocks then side chains will eventually displace the core blockchain. As a developer of potential side chains I am rooting for 1MB blocks. The only way for the Bitcoin core developers to remain relevant is to scale the core protocol to fend off competition from future side chains," said Larimer.
The scalability issue debate has been going on for over a year, with the community unable to agree on whether the increase of block size from the existing 1MB would be a large step towards network centralization. One of the concerns is also Bitcoin Unlimited token (BTU) leading to a decline in BTC prices.
Votes of no confidence have been given on both sides, with prominent BTU supporter Roger Ver accepting a Bitcointalk forum challenge to a "1 to 1" trade from a user offering at least 60,000 and up to 130k BTU. Ver replied that he would gladly accept the challenge, having previously stated that he would dump all his BTC holdings.
“A lot of blockchain experts don't think that Ver knows what he's talking about. My bitcoin are all long term holds. Anybody that gets out now is a fool, and it's way too early to decide which fork will win the market.”
CoinIdol will be continuing to follow the story related to the Bitcoin Forking situation so that you will know where things are going, especially if Bitcoin Unlimited manages to take a hold of majority mining share.