What happened to bitcoin after fork

What are blockchain forks?

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When a hard fork occurs, all of the previous data transactions and the number of coins mined up to that block also carries over onto the new blockchain for the split coin. Again, think of this process as a cut and paste. In , since there were around This means that as soon as Bitcoin Cash was created, it already had Regardless of which side you are on, at the time the hard fork took place, anyone hodling Bitcoin was rewarded with Bitcoin Cash.

More on this concept known as airdrops soon. A cryptocurrency airdrop is a process in which the new split coin gets distributed to the public. This is a notorious term in the crypto world. Everyone saw how profitable the Bitcoin Cash airdrop was, so of course, they want to get in on the next one that will take them to the Moon!

Unfortunately, again, only to realize that once the masses bought into the coin, rising it price, everyone else who got in at a lower price, usually the criminals behind the project, then dumped their coins. This has been known to cause a rapid and massive sell-off that causes the price per coin to plummet, leaving those who bought in after the airdrop announcement at a significant financial loss. After Byzantium, there was still only one Ethereum.

One last note, ultimately we are talking about software here. And that means the specifics of each fork comes down to code. Quick rules for forks : If you want to ensure you have access to a fork, be in a wallet where you control your private keys and then follow these steps for claiming a fork. If you are running a node the full version of the software; the type where you download the blockchain , you MUST update your client before the fork.

On Airdrops : A fork is when a coin splits in two. An airdrop is when coins are sent to an existing wallet for any reason. Although you might hear the two words used interchangeably in casual conversation, an airdrop is different than a fork. Learn about airdrops.

With all the above in mind, to use the words of Coinbase when discussing a User Activated Soft Fork , and too add a few of our own notes, the result of a given soft fork or hard fork would generally be:. Any of the above cases can occur with a given fork, but the 3rd option is the most common and thus the expected outcome over time with hard forks that create new cryptocurrencies.

Again, Bitcoin Cash a Bitcoin fork and Ethereum a fork of what we now call Ethereum Classic are good examples of the expected outcome of hard forks that are meant to create two assets with market value.

Both chains exist, but one is more popular and generally maintains a higher value. Meanwhile, a soft fork like SegWit is generally meant to be the second case and a hard fork like Byzantium is always meant to be the first case.

What Are Forks and How Do They Impact the Price of Cryptocurrency? -

Why forks produce free coins : A blockchain is a ledger of transactions and is where the ownership of coins is recorded. Anyone who held coins before a fork, and during the fork, therefore will necessarily have coins on both chains after the fork has occurred. The snapshot happens at a block number, the block number is important with forks, the calendar date is only important for understanding when the block number occurred. It is not necessary to hold the original coin after the snapshot has occurred.

In cryptocurrency, a soft fork is a minor change to the software that is not necessary for all nodes computers running software to update to. Meanwhile, a hard fork is a term that describes a major change to the blockchain protocol that can fundamentally change the way a crypto network works it can roll back transactions, it can change the way mining works, etc. There are often competing visions for the future of a cryptocurrency and this can lead to a point where traders and miners feel that they have no choice but to go their separate ways.

For example, the lead up to the Bitcoin and Bitcoin Cash split happened after a series of increasingly venomous debates within the community.

On the other hand, sometimes, this level of disruption can be enough to prevent a fork from taking place. The controversial SegWit 2. The plan was put on hold due to fears that the upgrade might lead to another hard fork and would further destabilize Bitcoin.

Thinking deeper about money with Ayumu Tahara

Hard forks can have a profound impact on the cryptocurrency and not just because of the uncertainty caused. The Bitcoin Cash hard fork is a good example of a quirk that can occur. For example, if you had held 10 Bitcoin at the time of the Bitcoin Cash fork, you would have 10 Bitcoin Cash. This can lead to some really interesting waves within the market.

What Are Forks and How Do They Impact the Price of Cryptocurrency?

Large traders, or whales , can make big waves on the market. Whales are generally large organizations that own hundreds of thousands of Bitcoins. This is enough that their decisions will strongly influence the direction of the market.

Some large private traders, or dolphins , also have enough stake to influence the market to a certain degree. This gives them a strong incentive to increase their stake in the parent token. Thus, they begin to buy every token they can find. Their huge size means that they can artificially drive the price of the parent currency higher in the lead up to the fork as the whales and dolphins buy up everything they can find.

The whales are rewarded with new tokens on a one-to-one ratio. Because whales know that the price of the parent company has been inflated by their actions they proceed to dump both the new token and the parent token on every exchange they can. This can cause the value of both the forked and parent token to crash in value.

Over time, their values will begin to stabilize as the traders use their profits to purchase more cryptocurrency coins. The above example also applies to splits where the entire blockchain is cloned. Many forks only copy the underlying code, so while a new coin is corrected it does not create duplicates. In these cases, traders act a little differently.

It is also possible to see traders largely abandon the original cryptocurrency in favor of the new fork, as happened with Ethereum and Ethereum Classic with the former strongly outcompeting the latter. A hard fork marks an unstable time for a cryptocurrency.

The community will often be divided over the issue and the market is generally very volatile, even by cryptocurrency standards.

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