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<\/p>\nBitcoin Cash hard fork, one of the biggest events in the cryptocurrency world, happened on November 15, 2018. Up to the very end, there were a lot of inaccuracies in the media about the matter, because the cryptocurrency fork generation process is not very easy to understand. Let\u2019s address this \u2013 today we will talk about the basics of cryptocurrency blockchain upgrades.<\/p>\n
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Before we start talking about soft forks, hard forks, and any other forks, here are a couple of basic terms for you.<\/p>\n
But why does the protocol need to be upgraded in the first place?<\/p>\n
First of all, it\u2019s one way to fix bugs discovered in previous versions of the protocol. Cryptocurrency is a relatively new invention that is still in the development stage.<\/p>\n
Secondly, forks allow networks to introduce new features. If we have Windows 10 at the moment, this means that the first OS version needed to be improved. The Bitcoin code has also been gradually upgraded over the years. Since it is in the public domain, every developer in the world can contribute to it. Of course, the upgrade is implemented only if the crypto community arrives at a consensus and approves the proposed protocol enhancements.<\/p>\n
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Thirdly, a protocol upgrade helps cancel transactions. It\u2019s hard for the government to fight against forgery, but for cryptocurrencies, any damage can be minimized by a hard fork that rolls back all transactions starting from a predetermined point in time.<\/p>\n
A soft fork is a protocol upgrade, but with backward compatibility.<\/p>\n
Let\u2019s take driving at the speed limit as an example. Let\u2019s say the speed limit is 40\u201360 km\/h, but then the government introduces new legislation that changes the speed limit to 45\u201370 km\/h. For those who usually drive at 55 km\/h, nothing changed. But those who drive at 40 km\/h, they need to upgrade their vehicle and speed up a little.<\/p>\n
The new legislation is like a soft fork in the cryptocurrency world. If you are happy with the way things are, you might as well avoid using the new upgraded version. Otherwise, you need to upgrade.<\/p>\n
Let\u2019s once again take a driver as an example. In this context, a hard fork would create a \u201cparallel universe\u201d with its own highways and speed limits.<\/p>\n
After the hard fork, driver Jack from Los Angeles who drives a BMW would create \u201cJack Cash\u201d out of \u201cLA Cash\u201d on \u201cBMW Cash\u201d. The original driver\u2019s clone would never find a job in LA or ride the BMW car, because the two universes aren\u2019t connected by any portal. Yeah, it sounds like a \u201cBlack Mirror\u201d script.<\/p>\n
Let\u2019s go back to cryptocurrencies. After a hard fork, the cryptocurrency blockchain is split into two chains that are not connected in any way at all, they are two different universes. Each chain has its own transaction history that is usually inherited from the original cryptocurrency. As a rule, after the hard fork the old universe is forgotten, and everyone is only interested in the new one.<\/p>\n
Of course, there are exceptions to the rule, and sometimes both worlds remain active. Here are a couple of examples.<\/p>\n
Bitcoin Cash is the result of a hard fork. The coin split from the original Bitcoin on August 1, 2017. Right after that, BCH team headed by Roger Ver started campaigning against the main cryptocurrency, but to this day their actions have led to nothing.<\/p>\n
Another sad day in Bitcoin history is the fall of Mt. Gox. A similar thing also happened to Ethereum, the only difference is that in this case, the victim was a DAO smart contract, as opposed to an exchange.<\/p>\n
At first, the Decentralized Autonomous Organization (DAO) was intended to be a sort of a venture fund, where shares were distributed among members in proportion to their contributions in ETH. The project gained popularity and managed to raise 12.7 million ETH. Based on the exchange rate at the time, this was valued at around $250 million.<\/p>\n
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Sometime later a hacker found and exploited a flaw in the DAO code, allowing him to steal over 3.6 million ETH. In order to prevent the hacker from keeping the money, the crypto community voted for Ethereum to hard fork, in which the majority of affected users had their funds reimbursed. This is when Ethereum Classic<\/a> was born.<\/p>\n As a general rule, all hard forks follow the same scenario that we previously described. A new universe equals new life. Now let\u2019s see what happens when both worlds continue after a hard fork.<\/p>\n Our friend Jack from Los Angeles had a BMW. He had the car key. In the city of LA Cash in the new universe, Jack\u2019s clone Jack Cash also has a BMW car that looks exactly like Jack\u2019s car in LA. Because he has the car key, he can easily start his car. The most surprising part of the story is that the key works with both BMW and BMW Cash. If a criminal that can travel from one universe to the other decides to steal Jack Cash\u2019s car key and his BMW Cash, he can steal Jack\u2019s BMW too.<\/p>\n Obviously, Jack is afraid to lose everything. So what should he do? He has two options:<\/p>\n The first option is safer, but it requires some serious thinking. The safe must be secure. The second option is very simple because Jack doesn\u2019t really need to do much. However, the parking lot might turn out to be fake, and all the parked cars may disappear over time.<\/p>\n Now let\u2019s go back to cryptocurrencies. You have a private key that lets you access your funds. Bitcoin developers had a disagreement and decided to split: after the hard fork, some continued working on the previous chain, while others created the new Super Bitcoin. If you do everything correctly, as a result of hard fork, instead of 1\u00a0BTC you had before the fork, you should end up with 1\u00a0BTC and 1\u00a0SuperBTC.<\/p>\n It\u2019s the safest solution. The important thing here is patience and accuracy. Remember that your private key is the most important thing you have, as it gives you access to all your funds.<\/p>\n Here is what to do in case of a potential Bitcoin fork. This guide can be applied to any other coin.<\/p>\n As a result, you are supposed to have two new addresses: one in the Bitcoin wallet and the other in the Super Bitcoin wallet. At this point, these addresses are in no way connected to each other.<\/p>\n We strongly recommend reading \u201cHow to backup your wallet? How to backup your private keys?\u201d guide that you can find in FAQ<\/a> section on 2Masternodes<\/a> masternode hosting service.<\/p>\n You should find a reputable exchange that would announce that all Bitcoin owners will get Super Bitcoins. Send 1 BTC to the exchange and hope for the best. After the hard fork, create two separate wallets \u2013 one for BTC and another for SuperBTC, because now they are two distinct cryptocurrencies. Transfer your coins from the exchange to your wallets.<\/p>\n Bitcoin Cash hard fork, one of the biggest events in the cryptocurrency world, happened on November 15, 2018.<\/p>\n","protected":false},"author":4,"featured_media":1816,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-1112","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mining"],"yoast_head":"\nWhat To Do After a Hard Fork? How To Avoid Losing Coins?<\/h2>\n
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Do Everything On Your Own<\/b><\/h3>\n
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Wait Out the Fork On an Exchange<\/h3>\n
Important: We don\u2019t recommend storing your funds on cryptocurrency exchanges. Use them only to exchange cryptocurrencies.<\/strong><\/pre>\n","protected":false},"excerpt":{"rendered":"