The October 25 Bitcoin Gold Hard Fork — Taking Advantage

Well, it has nothing really to do with gold. It's a "fork in the road" in order to change a few things going forward for those who want that. I'm not going to cover those. You can Google it.

All crypto is open source code by design. Anyone can copy it. No copyright. No trademark. No patent. And this is its elegance.

Anybody can fork Bitcoin.

You get the code, call it something else, do an ICO or just put it out there and see what happens. Even at its worst, blindly investing in all ICOs without prejudice still nets over 1000% profit presently.

Let's be smarter and maybe eek out 3000-500% by passing on obviously stupid, scam, and fraud.

So let's get to the gist.

What's a Crypto Hard Fork?

Because of its open source nature, anyone anywhere can do as they wish. There's no authority to check with. It does not have to be submitted to Congress and the President for votes and signatures.

If you have the skilz, you can create a new coin tomorrow using the exact same core code as Bitcoin. Anyone can.

You can also HARD FORK it. Anyone can. You can only lose the money it took you to get the hardware and software in place to do it.

Soft forks have been done lots, most fail. Hard forks are enticing and have been proven something to pay attention to.

First, let's get some conceptual stuff out of the way and cover conventional stock splits and spinoffs.

TL;DR

A stock split is where you have, for example, 100 shares in a company trading at $100 per share, and a 2:1 split means you have 200 shares at $50.

Simple. It's a psychological thing. $100 was too much to pay for a share. $50 is a bargain to pay for a share—that's a half share. It's psychological and will become more and more relevant as bitcoin hits $10K and keeps sailing, and people aren't yet talking about the trading value of a Satoshi, worth 1/200th of a US cent right now...Bitcoin's built in 'stock split' and subject of a future fun post.

A spin off, in theory, does something different. Say you have 100 shares in a company trading at $100 per share, and it splits off what's accounted to be 1/3 of the company worth, so in exchange, you get 33 shares in the new company. In theory, the parent company stock sells off to $66 per share, you have 100 shares in the new company at $33. So, in theory, you begin with about the same total value, but in two securities instead of one, and from there they do what they will, separately.

What happens from there can be very beneficial to investors (Ebay and PayPal as an example) or detrimental. Sometimes, the sum of the parts is less than the former whole.

A crypto hard fork can be at least as good as the best hopes from an equity spinoff and the August 1 Bitcoin Cash, hard fork (Bitcoin spinoff) proved that. At the time of the fork, Bitcoin was trading at about $2,700.

Bitcoin cash then began trading a bit over $300.

It climbed to over $600, now trades back in the 300s. So, per the theory of stock spin offs, Bitcoin ought to have adjusted down, trading at $2000-2500.

But Bitcoin isn't a stock. Anyway, so, Bitcoin Cash was a decent money-making opportunity, especially for those who may have had a lot of BTC, and were subsequently unable to unload Bitcoin Cash at $600.

So, how do you participate in the Bitcoin Gold hard fork, coming up sometime on October 25 (when its blockchain reaches block 491,407...so no set time)?

1. While it's possible that BTC held in an exchange account will eventually be credited to you, unless you hold the private key, there's no guarantee.

2. So, you want it in your own wallet. I use Jaxx, currently. Here's a whole list of all sorts of alternatives.

Speaking of wallets, let me just briefly touch on crypto wallets as a conceptual thing, perhaps I'll expound upon it later. At first, most people getting into Crypto tend to think of wallets in a way analogous to what you keep paper notes in, physically.

But, there is no physicality to Crypto, thus nothing to store that can actually be identified as a "coin in digital form." What a Crypto wallet is, in fact, is something that generates a public address you can send from and receive to, and a private key that proves on the blockchain that the holder of that private key is who owns the transactions at the public address associated with that private key and is the only one authorized to generate sending transaction from that public address, provided there is a sufficient net balance of transactions at that address.

In reality, there is no coin, only transactions in a chain that just goes on forever and ever.

Scary, huh?

So, once you have your Bitcoin "in your wallet," you just have to wait and see how you'll eventually be able to access your Bitcoin Gold either by the wallet supporting it, or by importing all of your transactional balance public and private keys at the time of the fork into a supporting wallet.

For instance, my wallet, Jaxx, generates a new set of keys every time bitcoin is sent to a wallet address. All addresses are all valid in perpetuity, your total balance being the sum of the balances of all of them. In Jaxx: Tools > Display Private Keys > Confirm > Enter Pin > Display Bitcoin Private Keys.

Then, it gives me a list. There are currently ten sets of keys, and 4 of them have balances the total of which is my "bitcoin balance" amongst all of those addresses on the blockchain.

So, should Jaxx not ultimately support Bitcoin Gold, I'll be able to find a wallet that does, import those keys, and should then have access to all my Bitcoin and all of my Bitcoin Gold, separately. Note that there is no conflict having your Bitcoin in two or more wallets at the same time. That's because there's nothing actually "in your wallet." Should you send Bitcoin to someone from one wallet, you can then open your other wallet and it will adjust your wallet balance of Bitcoin accordingly. See, your wallet is only a crypto, private key portal to the blockchain that gives you rights to create transactions.

So, minimally, you just make sure your Bitcoin is in a wallet and sit tight. Alternatively, you could take more advantage by doing one or more of the following.

  • Do an instant purchase of Bitcoin today and move it to a wallet. You can do it on Coinbase with a debit card for a 4% fee, but it's likely your Bitcoin Gold will eventually more than make up for that.
  • You can trade all or a portion of your portfolio holdings into BTC and move that BTC to a wallet (then, after the hard fork, you could move it back and get back into your portfolio positions).
  • Jaxx wallet has "Shape Shifting," which is a technology that lets you very quickly "shape shift" back and forth into any coins the wallet supports. So, for example, my Patreon portfolio currently holds about $500 of BTC, all of it in Jaxx. There's another $380 worth of about 6 other coins the wallet supports. I could shape shift everything into BTC, then after the dust clears, shape shift back into the other coins.
  • UPDATE 10/23/17 0800 PST: Bittrex has shut down withdrawals of BTC for 24 hours pending the fork, so be mindful before sending BTC to Bittrex.

So, there you have about all you need to know. Feel free to pop questions in comments or add to the above in any way you think might help the Patreon community of up & coming crypto geeks.

Update 2/23/17 1130 PST: I went ahead and shape shifted all but placeholder amounts in my Jaxx wallet to BTC, about $380 worth, mostly to see if it would work. It did.

ETH - 0.314

DSH - 0.15

REP - 1.72

LTC - 1.42

ZEC - 0.42

CVC - 97

PAY - 16

BNT - 15

The only snag was that I did the ETH first, and I guess Jaxx uses ETH for the gas, so I ran out of it. So, I just did $25 instant buy of ETH on Coinbase, sent it to Jaxx, now I'm sure to have plenty to shape shift back once dust settles.

This stuff is seriously fun.

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