Bitcoin can be forked. It’s almost a magical process, doing a fork. Money, raining from the skies. You will realize how magical it seems, once you try to explain how the fork works to someone not familiar with cryptocurrencies and blockchain in general.
What do you mean? You have some bitcoin, and then suddenly you have also some other coin? So the original bitcoin is split in two? Does Bitcoin lose half of it’s value then? But how can you just create new money? Who is paying for that?
These are some of the questions you will face and sometimes have hard time explaining. But this series will not be about explaining what forks are, how do they work and why would you create one. No. This series will be about my experience with extracting as much value as possible from them and doing so safely.
I waded thru the murky waters of cryptocurrency underground, registered on shady websites and exchanges, tried myriad wallets and had to witness UX abominations creeping in from the times before Web 2.0. I did this for fun and profit and will present my findings here over the following days and weeks.
So, what do I think about Bitcoin forks, you might ask? I basically think they are scams by design, with one exception. That exception is Bitcoin Cash (BCH). I believe that it was created from misguided but honest attempt to increase the capacity of the network and later some bad people snowballed to it. The solution they chose was really bad. Bitcoin (the original) will solve scaling with Segwit, Lightning and side-chains in a much better way than simple block size increase will ever do.
The rest of the forks are outright scams designed to extract money from naive traders who think they will get lucky and ride the wave. I am happy to take their Bitcoin in exchange for these shitcoins.
The conclusion_? I want to convert everything I can to Bitcoin._
There are services, which specialize in fork digging, such as Walleting Services (yes, that is an affiliate link which gets me 1% of the coins you dig thru them). I have used this service for some forks and so far it seems safe. They charge 10% for the service. BTCDiv.com is a good source of information too, as are Bitcointalk forums.
Edit: Recently a new web site came up, forkdrop.io, which provides very comprehensive info on most forks in a friendly interface.
Please bear in mind, we are dealing with money here. Do not take advice from strangers on the internet at face value (that includes me) and never apply it without doing your own research and educating yourself.
This series is mainly for entertainment purposes and I could be making it all up for all you know. I am not, but you should assume I am.
The most important rule is, before you start doing anything fork-related, move all your coins to a fresh wallet generated from a fresh seed. And I mean ALL coins (Bitcoin, Litecoin, Ether, what have you). Most ways to extract the forked coins involve you giving away your wallet seed, thus compromising it forever. You should never reuse this compromised seed, ever. Just don’t.
If you are using a wallet like Electrum, always generate new wallet with new seed. If you use a hardware wallet like Trezor or Ledger, you need at least two of those and you should always re-initialize (and securely store the seed) it before you move your valuable coins to it.
If you do not understand something during the process, just stop what you are doing and go educate yourself. Always take enough time to familiarize yourself with what you are doing and why are you doing it. It helps to write down a plan of the steps you are going to do.
Sometimes, you might feel the need to work fast. “Oh, quick, I have to hurry, before the shitcoinX loses all of it’s value.” Don’t. None of the forks are valuable enough to jeopardize your Bitcoin or Litecoin over it. Heck, many of the forks are not valuable enough to justify the time I spent on them. I did it anyway, you know, for science, but I always was strict with my security.
Be warned. If you follow the stories and you want to do it yourself, you will have to register on some shady Chinese exchanges, install dubious wallets on your phone or computer and sometimes give your keys to people you have no way of verifying are, who they are, and will do, what they say, they will do. All of it is risky, but can be made less so if you keep precautions.
I recommend you do all the desktop stuff in isolated virtual machine. I recommend you get separate phone for installing the wallets and I recommend you create a throwaway e-mail account to use for registering. If you don’t know how to do any of these things, maybe this is not for you.
And, I have to repeat once more, move all your valuable coins to a fresh wallet generated from a fresh seed before you do anything.
Next up: Bitcoin Cash (BCH)
In the next story, we will take a look at getting (and dumping) the most prominent fork of them all – Bitcoin Cash. Stay tuned.
UPDATE: I will update this post and link the articles in the series here.
- Bitcoin Cash (BCH)
- Bitcoin Gold (BTG)
- Bitcoin Diamond (BCD) and Super Bitcoin (SBTC)
- Bitcore (BTX)
- BitcoinX (BCX)
- Final post: The Others