By Iyke Aru
There is some panic among users of Bitcoin regarding their fate in the event of a split within the community. Online web wallet owners seem to be the most concerned as the majority of them, apart from lacking an in-depth knowledge on the functionalities of the Bitcoin protocol assume that they may be stuck with whichever chain that their vendors decide to go with.
Some newbies are also suspecting the possibility of having their Bitcoins split between both chains in a system that may deny them the opportunity to decide which chain to follow. In a situation where the value of the Bitcoins varies, they would be left with no chance in choosing the eventual value of their Bitcoins.
Huge problem for exchanges
Digital currency expert Aleksandar Matanovic acknowledges the fact that it will not be an easy task for online wallet providers and exchanges to do the necessary adjustments in the event of a hard fork.
However, he notes that people should have coins in both chains after the split, regardless of where they are keeping them.
Matanovic explains that it was far easier with Ethereum hard fork because of the element of surprise associated with the creation of ETC.
“Hardly anyone expected we would have ETC, so exchanges just kept doing what they had been doing before and were adding ETC later. With BTC it would be difficult because it seems that, in the case of a hard fork, both chains will be very significant right from the moment of splitting.”
Matanovic points out that the people will probably expect exchanges to have both versions of Bitcoin available for trading right after the split. He notes that it shouldn’t come as a surprise if most exchanges stop working for a couple of hours or even days after the hard fork, to give themselves some time for adjustments.
Jason Cassidy, President at Crypto Consultant supposes that there is somewhat of a ‘plan’ in place to administer such a change in the Bitcoin protocol to secure the people’s Bitcoins in the event of a highly likely hard fork.
Cassidy explains that a hard fork creates two copies of the Blockchain, two networks and two versions of the software. This leaves the miners and users themselves to determine what version of the Blockchain they will support. He notes that recently, a group of almost 20 exchanges came out in a joint statement, pledging support for Bitcoin core.
The exchanges are going to treat Bitcoin Unlimited as an altcoin of the current Bitcoin Blockchain, opposed to a legitimate challenger.
Cassidy also notes that if a hard fork takes place, exchanges are likely to freeze withdrawals for a period of time leading up to and preceding the hard fork itself. Exchanges should credit users holding Bitcoin with Bitcoin unlimited coins (BTU) in addition to their regular Bitcoins (BTC).
“If you held five Bitcoins on an exchange prior to a hard fork, you should have five Bitcoin on the Bitcoin Core network along with five Bitcoin on the Bitcoin Unlimited network. Everyone, will in essence, gain double their Bitcoins.”
Cassidy explains that this will only happen upon the condition that the Bitcoin Unlimited developers apply a fix against ‘replay attacks’, a situation where a user’s transaction may be broadcast on both networks unintentionally. This happened last year during the now infamous Ethereum hard fork.
He concludes by saying that if a Bitcoin hard fork does take place then the industry will learn from some of its lessons as he describes the situation as a bump in the road.
“Bitcoin is going to be here for the long haul and will survive this transition,” he says.