How to gain free money on the upcoming October 2017 Split?

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August 7, 2017
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How to gain free money on the upcoming October 2017 Split?

Family squabbles are often… and bitcoin is going to split (again)

There was expected to be a chain split following the “user activated soft fork” (BIP-148 aka UASF) at the 1st of August 2017. Due to SegWit2X this didn’t happen – but we did get a quite clean chain split between Bitcoin Cash and Bitcoin.

The SegWit2X-proposal is still somewhat controversial, and may cause a major chain split in October. And it may not be pretty…

During the last year or so, the Bitcoin schism can briefly be described as one camp fanatically rejecting the SegWit protocol extension, while the other camp fanatically would be rejecting bigger blocks. Not any more – after the SegWit2X compromise agreement, we now we have three camps:

  • The crazier big-blockers have their full attention on the Bitcoin Cash altcoin. They fully recognize that Bitcoin Cash is an altcoin, and there is good two-way replay barriers making sure Bitcoin Cash and Bitcoin are two separate entities. Some of those – probably most of them – have a hope that Bitcoin Cash will replace Bitcoin – implicitly that Bitcoin will fail – I find this a bit scary actually.
  • The more “moderate” folks support SegWit2X. More than 90% of the miners (by hashing power) has flagged support for the SegWit2X compromise. Many of the exchanges have also promised to support SegWit2X .
  • The craziest small-blockers still refuse any kind of increase on the block size limit. The typical small-blocker pretends to be ignorant towards the SegWit2X-proposal, bragging about the successful BIP-148activation on the 1st of August was a big success. In reality BIP-148 was uneventful due to the SegWit2X initiative.

I consider myself to be “moderate”, but more sympathic towards the big-blockers than the small-blockers.

SegWit activation – BIP-91, BIP-148 and BIP-141

It was predicted that there would be a lot of chaos at the 1st of August, as BIP-148 was to activate. Any node supporting BIP-148 would then be rejecting any block not flagging support (voting) for the SegWit extension. With around 20-25% of the miners supporting SegWit (and unknown amount of them supporting BIP-148) the “Bitcoin” being mined by most of the miners would efficiently be another Bitcoin than the Bitcoin accepted by the BIP-148-supporting nodes – and the BIP-148-supporters would hope that they would be able to force the miners to support SegWit.

We were rescued from disruptions by the SegWit2X initiative (BIP-91). There were overwhelming mining support for SegWit2X. After the activation, BIP-91 does the same as BIP-148 – it also rejects any block not voting for SegWit. Since BIP-91 was activated, blocks not voting for SegWit would not be included in the blockchain. This makes the BIP-148 activation into a non-event.

Now people are also celebrating that the SegWit BIP itself (BIP-141) has locked in. It’s also a non-event, it was 100% predictable when BIP-91 locked in and changes nothing. SegWit is not active yet, SegWit will become active around the 21st of August. Mark the date – I predict a small jump in the Bitcoin price when people celebrate the activation of SegWit.

One of the selling-points for getting SegWit activated was that it will increase the capacity (and hence reduce the bitcoin network fees). The increase will come gradually, we won’t see any fee reduction on the 21st of August.

So?

So, if you have some Bitcoin lying around, DO NOT CASH OUT until the forks are over. If you have idle cash, consider buying some bitcoins and hold out.

When the fork happens, you bitcoin may becomes 2. Like a cell, splitting into 2 identical cells. In other words, if you have 1 Bitcoin, you may have 1 bitcoin, plus another new Bitcoin ABC, whatever name they may call it. Of course, the exchange or wallet you have must support the new coin for this to happen.

Here are the steps:

If you do not have any bitcoin, buy some here:

  1. CoinHako – Use the link below to get extra SG$5
    https://goo.gl/okPL6s
    To fund or buy BTC, you may need to sign up a Xfer account
  2. CoinBase – Use the link below to get extra US$10 if you buy $100 worth of bitcoin
    https://goo.gl/e5KWbx
    You may fund or buy BTC using credit card or via Xfer

You DO NOT need to buy 1 whole Bitcoin. You can just buy 0.005 BTC, which is, maybe a less than $300; or whatever you are comfortable.

After you got your Bitcoins, transfer to one of the following:

  1. Poloniex – https://poloniex.com
  2. MyCelium Wallet – https://wallet.mycelium.com/

As usual, you will need to go through the process of ID and address verification. This is as easy as taking a picture of your ID (NRIC, driving Licence, etc.) and a copy of your latest bill (e.g. Utilities or Telephone bill) for address verification.

I am not 100% sure whether Poloniex or MyCelium will support the new bitcoins split but there is a high chance that they will.

Wait until the fork is over and see what are the options to cash out.

All the best!