Jeremy Barnett November 2nd, 2017
Bitcoin is splitting again.
Will you be prepared and more importantly are your Bitcoins safe?
If you are unfamiliar with hard forks let me give you a brief explanation.
A hard fork is an incompatible change to the Bitcoin network, which leads to a split into two separate cryptocurrency networks by default — the ability for each network to last depends on the level of support received by each network.
What Is NYA or SegWit2x?
NYA (aka New York Agreement or aka SegWit2x) is a Bitcoin scaling solution that was signed and agreed to by a large number of miners, developers, and investors in Consensus 2017.
SegWit2X is a fancy derivative name given to a combo of scaling solutions (i.e SegWit and 2MB block size increase). It simply means implementing SegWit first, and then within 3 months of SegWit activation, it aims at implementing a 2MB block size for the Bitcoin network.
And since SegWit2x’s first leg (i.e. BIP 91 (SegWit)) was already put in place on July 21, 2017, the last and final leg is still pending.
The latest SegWit2x hard fork, which should split off on or around November 16, has the potential to create two blockchains, each with its own set of coins, brings to a head a three-year-long battle between two factions who’ve been warring over a seemingly technical question over how to increase the amount of transactions the blockchain can process per second.
During hard forks, such as The Bitcoin2X (B2X) fork – also known as SegWit2X there may be periods when the Bitcoin network is unstable. For example, in the case of the upcoming Bitcoin2X fork, there is no Replay Protection, which may lead to transaction errors and double spending.
After the fork
Blocks may be slower shortly after the hard fork and your transactions will take longer to confirm. You will have to pay a higher transaction fee if your transaction is high priority and you want it confirmed in the next block. You should try to get any important transactions done a few days before the hard fork date. A lot of websites and programs will likely pop up around the time of the hard fork offering to split your Bitcoin so you can have access to both your BTC and to the new altcoin created by this contentious hard fork, you should exercise caution as many of these services are likely to be scams trying to steal your bitcoin. As the hard fork has very little replay protection, most transactions you perform on the Bitcoin network will also be valid on the hard fork network. You should keep this in mind when transacting.
The following companies and services have pledged to adopt the contentious hard fork:
Replay Attack Problem
SegWit2x will not have replay protection like Bitcoin Cash had.
It will rather have an opt-in replay protection in place.
This is so because the SegWit2x supporters and a SegWit2x developer (Jeff Garzik) have clearly stated that SegWit2x is not an altcoin, and it will be a Bitcoin upgrade.
For the uninitiated, replay protection is a technical update that stops the same transaction from being broadcast on both chains. (Read in detail about replay attacks).
A replay attack works as follows. Following a fork, if Bob sends Alice 10 Bitcoins on the forked chain, an attacker can copy that transaction onto the legacy chain and cause Bob to send 10 Bitcoins on that chain as well. Because SegWit2x does not include replay protection--unless you opt in--the Segwit2x fork leaves users susceptible to a replay attack.
Due to this, SegWit2x is being highly criticized by legacy Bitcoin supporters because it is a kind of open attack on Bitcoin and its users.
What Is This Opt-In Replay Protection And Why Should You Know About It?
Opt-in replay protection is a kind of replay protection that is not inbuilt in SegWit2x’s version of Bitcoin. As a user, you yourself need to opt-in and apply for it.
This was proposed by Jeff Garzik, the developer of SegWit2x. It has been highly criticized because it will put users’ funds at risk.
As a Bitcoin HODLer, you should know about this because if you do a transaction on either of the chains without “opting in”, then your coins on the other chain will be at risk.
Anyone will be able to pick up that transaction and “replay” it onto the other chain, and you will lose those coins.
Check out this must-read piece written by Bitcoin developer Jimmy Song: How Segwit2x Replay Protection Works.
The Conclusion (What You Need To Do)
I want to conclude by stating the same thing that I have stated many times:
- Your Keys = Your Coins; Not Your Keys = Not Your Coins
But now that we have this opt-in replay protection thing, here is some other advice to avoid losing your funds:
- Don’t transact for some days after the fork until the dust settles and until one of the parties (SegWit2x or Legacy Bitcoin) puts an auto-replay protection in place.
- If you still want to transact and want to opt-in for replay protection, follow Jimmy Song’s article on How SegWit2x Replay Protection Works.
- Don’t keep your coins on a third-party exchange where you don’t control your keys.
- Use hardware wallets like the Ledger Nano S and Trezor to control your coins.
- If you don’t have a hardware wallet, use software wallets like Jaxx or Exodus to control your private keys.
- Don’t fall prey to fake websites/wallets demanding your private keys to let you access your SegWit2x coins.
- And last but not least, do not become affected by the FUD/FOMO because one of the versions after the fork will still be the dominant one…
Credits to:
Jeremy Barnett BitcoinMyBiz.com
Patrick Thompson CoinTelegraph
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