There are two cardinal rules bitcoin holders should follow to prepare for the bitcoin hard fork. These rules will help users protect their bitcoin and gain access to bitcoin cash after the fork resolves.
Also read: Fork Watch: Korean Bitcoin Exchanges Divided on ‘Bitcoin Cash’
Bitcoin.com has had a lot of people inquire about how to protect their bitcoin and gain access to bitcoin cash with the popular wallets Breadwallet and Blockchain.info specifically, which will be addressed at the end of this article.
The hard fork is happening Monday. Bitcoin cash is being created by the fork. It is a new and different token (coin) than “bitcoin legacy” (the current Bitcoin network).
Do not panic, though. Your coins will not just evaporate into thin air. You will have options on how to handle the consequences of the fork no matter what happens. Here are the two cardinal rules.
Rule 1: Protect Your Private Keys
The most important thing to remember: do not keep your coins on a custodial wallet. This will ensure you will have access to your bitcoin after the fork. Make sure you store your coins in a wallet where you KEEP THE PRIVATE KEYS.
Keys are not the same thing as “password”. You can use a password to login to a service (like an online wallet). “Keys” refer to the actual code used to control your funds (your coins) on the Bitcoin blockchain. As long as you have the key, you can always use that key (in almost any Bitcoin-compatible wallet) to access your funds.
To keep your private key private all you need to do is to use a wallet where you create a seed code or generate a password that protects your private keys. Many wallet applications provide information on whether they are custodial or not.
As a rule of thumb, any trading platform, exchange, or web wallet generally manages user’s keys themselves. They do not give you access to the keys, so in reality they control all the coins on their site — much like a bank would control your assets if they are kept inside.
For clarification, a word code or seed code basically acts a replacement for your private keys. In the event that you lose your private keys, the seed code is used to regenerate that key and gain access to your coins.
When the fork occurs, possessing the private keys means you will be able to access also bitcoin cash. The amount you can control will be the equivalent amount of bitcoin you had the keys to at the time of the fork. If you do not have your keys, however, the custodian or web wallet controller will make that decision for you (whether to credit you with the new bitcoin cash coins or not).
Waiting Period: Obtaining Bitcoin Cash After the Fork
Furthermore, after the fork completes, each wallet provider may provide (or have already provided) information on how to manage bitcoin cash. Usually, this will just involve each service/app creating a tool or application that allows you to access your newly minted bitcoin cash. The user can simply wait until the service in question provides that tool. Read the news blog of the company behind the wallet you are using to check their latest statements. If there is no statement on Bitcoin Cash and they don’t reply to questions on the matter, it might be advisable to move coins to a wallet that explicitly supports bitcoin cash.
If the company does not, it is still possible to extract your private keys (in most cases, not all) and use them to claim bitcoin cash in another wallet, although this process requires some technical knowledge of command line or code. It may be best for most users just to keep their keys in wallets that have already announced support for bitcoin cash. Coinbase.com, for instance, currently does not support bitcoin cash.
Another option, although a bit riskier, is to place your coins at an exchange that’ll support bitcoin cash (they’ll credit your account with the same amount of bitcoin cash). Here is a list.
Rule 2: Do not Transfer Bitcoin During or Immediately Following the Fork
The second rule: Users should not to do any bitcoin transactions — send or receive coins — during or directly following the fork. All users should wait until two or three days after the fork before sending funds (maybe longer depending on network stability). This is important because the network may be unstable and vulnerable to attacks during this period. However, any vulnerabilities cannot be easily exploited if users are not sending funds around.
If you follow the two rules cited above, you should be well protected both during and after the fork, as well as be able to access bitcoin cash. Stay tuned to Bitcoin.com for more information regarding the fork as the situation develops.
Obtaining Bitcoin Cash on Breadwallet and Blockchain.info
Some users are confused about how they will obtain bitcoin cash on Breadwallet. This should be a simple process. After the fork, Breadwallet will develop a new wallet application specifically for bitcoin cash. A user will then just use their seed code from their original wallet with the new one to gain access to their bitcoin cash.
It is still unclear how long it will take Breadwallet to develop the application. However, after the dust settles, users should still be able to send and receive their “legacy” bitcoin. Their bitcoin cash amount — at the time of the fork — should remain safe until Breadwallet’s application goes live.
Bitcoin.com spoke with Aaron Lasher, the CMO of Breadwallet. He clarified:
Subsequent to a persistent fork, bitcoin experts and coders can access their private keys using the BIP39 protocol and their 12-word recovery phrase. Retail customers will need to wait a little longer for us to release a separate version of the app that segregates the coins in a user friendly manner.
In the case of Blockchain.info, users must first make certain they generate their private keys on the security settings page (a 12-word seed phrase). This will guarantee the user retains access to their funds after the fork. Blockchain.info has not provided details on how they plan on supporting bitcoin cash. Founder, Peter Smith, tweeted users can choose their fork at Blockchain, but did not provide more details.
Transactions clearing in a timely way at @blockchain and with your own private keys, you can choose which fork to be on. #BeYourOwnBank
— Peter Smith (@OneMorePeter) July 29, 2017
Blockchain.info could still opt not to develop a tool or application to give users access to their bitcoin cash funds. If this occurred, users would have to extract the private keys to later gain access to their coins via another wallet that supports bitcoin cash. Currently, it would be recommended that users keep their bitcoin with wallet providers that have detailed how they are going to provide access to bitcoin cash. This will make obtaining it easier after the fork resolves, without having extra technical/coding skills.
Not Keeping Bitcoin Cash
All users must also bear in mind they are not in any way obligated to access or try to keep any bitcoin cash. If you just want to access your bitcoin, all that is recommended to do is wait for the fork to finish and the dust to settle. When the fork resolves, you should be able to continue using or saving your bitcoin like nothing happened.
If you have any further questions about this process, please post them below! We will do our best to answer questions and help users secure their bitcoin and bitcoin cash.
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