How to protect your Bitcoin from the expected hard fork and potential blockchain split

Rage Review : In the past two years, the market price of Bitcoin has experienced dramatic ups and downs, which has triggered a heated debate about potential software upgrades, also known as Bitcoin hard forks. For improving the functions and effectiveness of digital currencies, forks are inevitable and necessary. For the online gambling industry, Bitcoin is also an extremely advantageous form of currency. This requires Bitcoin holders to take preparatory measures to deal with the various possibilities after the fork.

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As of April 2016, the highest market price of Bitcoin was just over $400. However, it surged to over $750 in June, and the price has continued to rise steadily since then. Just before January 2017, the price soared to over $1,250, but in less than two weeks, it quickly fell back to $750.

Since January this year, the price of Bitcoin has recovered steadily. On March 1, the price almost reached $1,300, then fell to $900, and then recovered again and stabilized above $1,000. These dramatic fluctuations in the Bitcoin market price have triggered a heated debate about potential software upgrades, which are called "forks."

Forks are inevitable and necessary to improve the functionality and effectiveness of digital currencies. This is similar to traditional electronic software upgrades: some upgrades are absolutely necessary to continue using the program, these are called hard forks. Non-mandatory upgrades (but highly recommended) are called soft forks. Regardless of whether the software upgrade is a hard fork or a soft fork, the software improvements of digital currencies are all about transactions.

Bitcoin is a favorable form of currency for the online gambling industry, and its value is tied to privacy, which in turn is tied to decentralization. Cryptocurrency transactions are not monitored by corporate or government interests. Using a decentralized currency, then, ensures that transactions are private, despite the fact that such transactions are recorded in an open form through a digital ledger called a blockchain.

A blockchain, as its name implies, is a chain of blocks, each containing a predetermined number of transactions. Increasing the number of transactions in a block and increasing the speed of transactions requires a software upgrade, or a fork. If the Bitcoin open source community agrees to a major software upgrade or hard fork, it will inevitably and irreversibly split the blockchain into two separate Bitcoin entities, each running separately and creating two separate digital currencies: BitCoin Core (BTC) and BitCoin Unlimited (BTU), a somewhat unnecessary outcome.

If these two different independent blockchains are formed in a hard fork, there are three possible outcomes: all Bitcoin will become BTC, or all Bitcoin will become BTU, or the currency will double and exist on both blockchains. There are a lot of "what ifs" in this situation, but wise Bitcoin holders are preparing for all three possibilities.

Bitcoin is usually stored and accessed in two ways: privately bought and sold or through trading platforms. Bitcoin holders concerned about potential hard fork blockchain split scenarios should consider the risks associated with trading. For example, Coinbase Director David Farmer recently stated in his blog post published on March 19: "Customers who wish to access both blockchains in the event of a hard fork should withdraw BTC from Coinbase," and "Customers should be aware that customers will not be able to withdraw Bitcoin from Coinbase or deposit Bitcoin into Coinbase for up to 24 hours or more after the fork."

At this point, it’s time to take the traditional view: Controversial or not, the safest way to hold Bitcoin is to use a wallet to which you hold the private keys. Allowing a third-party exchange to hold your Bitcoins authorizes them to control the fate of your assets.