The way a fork works is instead of creating a totally new cryptocurrency (and blockchain) starting at block 0, a fork just creates a duplicate version that shares the same history.
9 Aug, 2017TECHCRUNCH.COM
Early yesterday morning bitcoin’s blockchain forked — meaning a separate cryptocurrency was created called bitcoin cash.
The way a fork works is instead of creating a totally new cryptocurrency (and blockchain) starting at block 0, a fork just creates a duplicate version that shares the same history. So all past transactions on bitcoin cash’s new blockchain are identical to bitcoin core’s blockchain, with future transactions and balances being totally independent from each other.
For practical matters, all this really means is that everyone who owned bitcoin before the fork now has an identical amount of bitcoin cash that is recorded in bitcoin cash’s forked blockchain.
But it’s not exactly this easy. If you control your own private keys, or hold your bitcoin in an exchange that said it would credit users’ balances with bitcoin cash, you’re fine and can access your newfound cryptocurrency right now.
If you held your bitcoin with a provider like Coinbase, which said before the fork they aren’t planning on distributing bitcoin cash to users or even interacting with the new blockchain at all, then you may be out of luck.
To be clear — this doesn’t mean companies like Coinbase and Gemini are taking your bitcoin cash for themselves. It’s just that they think it’s a distraction and not really going to be worth anything in the long run. If this proves to be false and the coins hold value, these companies will most likely end up distributing them to users.
If you know anything about cryptocurrencies you know there are a ton of them. Like thousands of them. Some are legitimate and substantially different (arguably better) than bitcoin, and some are pretty much just copycats trying to make a quick buck.
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Bitcoin cash is just another modified cryptocurrency.
But it’s getting more attention right now for a few reasons:
First, it was created as a result of forking bitcoin core, and not created from scratch. But this isn’t new — other cryptocurrencies have also forked from bitcoin in the past, and are nowhere near as valuable as bitcoin cash currently is. That being said, it does mean that anyone who held bitcoin before yesterday now potentially has access to an equal amount of bitcoin cash, which is giving it a lot of attention, as people are saying it’s “free money.”
Secondly, it’s getting attention because the hard fork was timed to coincide with bitcoin core activating a change in its code called BIP 148, which was a highly publicized event in itself. This Bitcoin Improvement Proposal was the result of months of negotiation among major players and activated Segregated Witness, something that will help bitcoin core scale going forward.
Right now, bitcoin cash is actually worth quite a bit — on paper at least. Some are trading it at around a value of $400 per coin, which makes it the fourth-largest cryptocurrency by market cap right now.