With August 1st rapidly approaching there seems to be several ways we could prepare for the birth of Bitcoin Cash
But before we can begin preparing strategies we have to have some kind of understanding about what is happening.
What's Bitcoin Cash, why is this even happening, what's this about doubling our coins come August 1st, and how can we make sure that we're positioned to potentially benefit from the share drop while minimizing any risk associated with this event?
Bitcoin Cash BCC
Bitcoin Cash is the result of a disagreement over how to move Bitcoin forward. To put it plainly, one side (BCC) wants to increase the blocksize limit while the other does not.
If you aren't familiar, a "block" contains a number of transactions and is cryptographically tied to the other blocks, hence the 'chain' in blockchain.
BCC will launch with an 8mb Blocksize. BTC will not increase the block size on its chain and will instead implement "Segwit2x".
BCC will offer replay and wipeout protection, but this is only relevant because it is forking off of Bitcoin in the first place. Still, it is good to know that doublespending your coins unintentionally doesn't seem to be a big concern.
What's interesting is the third feature offered by BCC, a mechanism for more easily adjusting the difficulty in the event of a low hash rate. This may help BCC survive through the first few days if there is low hash rate.
Why is this even happening?
Ultimately, this is all happening because the community was unable to come to consensus on how to scale.
Some of those against the limit increase feel that a larger block size would increase operating costs for full nodes which could result in issues with centralization further down the road. Also, many contend that there is no ceiling on block size that could accommodate potential future volume and that sidechains.
But further, the BCC side seems to regard segwit2x as an overly complicated upgrade that seems aimed to make Bitcoin a settlement layer.
There's clearly no love lost between these two camps, but this dramatic split does present the overall community with new coins.
Moar Coins?!?
It seems to be the case that if you store your BTC away into a private wallet with keys that you control, you will have an identical amount of BCC available after Aug 1st. It isn't clear if the exchanges will be following suit and crediting the respective amount of BCC for BTC left on the exchanges, but it seems to be a case by case basis as of now.
So your coins may be cloned even if they are on an exchange, though it's obviously best practice to move them if you are intent on receiving your free BCC.
More information should be forthcoming as this develops, and you can follow the latest on the Announcement thread for BCC to make sure you're up to date on how to claim your new tokens.
How're you positioning?
It's interesting to note that the alt market seems to be a bit bearish again after what seemed to be a post dip recovery. Could it be that some are pulling out of the alt market to consolidate back into BTC and maximize their sharedrop?
It does seem to be that most everything is trending downwards while BTC is trending up:
If this is the case, then it could be another great opportunity for an altcoiner like me to scoop up some more holdings on my Tier A alts like STEEM, ETH, and XRP. I'm also going to be on the lookout for further downward pressure on Basic Attention Token - BAT so I can get more of that, but that's because I work in the ad industry and love what BAT is cooking.
In the days following Aug 1st we could see value pouring back into Alts as the market begins to unpackage the new reality between BTC and BCC and as investors reposition themselves in the projects they may have liquidated from in anticipation of this sharedrop.
How about you?
I'm extremely curious how others are feeling about this event, and how they're thinking about handling the 1st.
Are you going to leave your alt investments as they currently are or will you liquidate so you can maximize the amount of BCC you'll get? Do you plan to rebuy anything you liquidate or will you hold in fear that any transactions might get messed up?
