Segwit2x was cancelled, but another fork could happen. Here’s what you need to know.

— Team VVToken

November 13, 2017

Bitcoin has undergone multiple hard-forks during its short lifespan, with Bitcoin Cash being one of the most recent and most successful of them all. Those that are new to Bitcoin, or simply out of the loop of its technology, may panic thinking that Bitcoins will crash or that their coins will disappear overnight. In reality, their Bitcoins are safe and sound and we should think of forks as new opportunities arising in the marketplace.

In recent news, the market was anticipating the Segwit2x fork, which as of last week was cancelled. The idea of the fork was to give Bitcoin 2MB blocks to make transaction times faster since Bitcoin is lagging behind with its older design. Even though Segwit2x failed to replace the core version of Bitcoin, a new fork may still be created if enough miners are on board and it will be yet another investment opportunity.

What Happens When a Fork is Made?

In reality, anybody may make a Bitcoin fork if they know how to compile the source code that is freely available on Github. What the popular mainstream forks are doing is making minor improvements to Bitcoin so that it is more efficient to the official version of Bitcoin. This code is compiled, usually re-labeled (like Bitcoin Gold), and it takes a snapshot of the current blockchain so that users will have an equivalent amount in both the new version and the mainstream version.

In theory, it is to persuade users to switch to a superior version of Bitcoin. In practice, many will treat the fork as a new altcoin (like Litecoin) and some may choose to sell it off or save it to future-proof their Bitcoin investment.

Why are Forks a Good Thing?

1. It gives users the ability to choose. The concept of Bitcoin was based around decentralization and financial freedom, yet Bitcoin Core developers can create the rules of Bitcoin. Forks will allow users to protest changes, or the lack thereof, so that it is more of a democratic process. An example would be the demand for 2MB blocks . This is one of the most beautiful features of the cryptocurrencies in general.
2. It doesn’t harm the market. The launch of forks may indeed have short-term effects that are mostly seen by day traders. In the long haul, forks do not negatively affect the market and may even positively affect it. More users are buying and hoarding Bitcoin, which drives the price up, so that they may participate in the exciting forks that are coming up.
3. Nobody misses out! Holders of Bitcoin are rewarded with an equivalent amount that they hold in their wallets during the time of the fork. Unlike the launch of some altcoins, there is nothing nefarious behind the current forks since coins are not pre-mined by the creators nor are there backdoor exploits installed. Everybody that invests in Bitcoin can be a part of the action.
4. We have the freedom to develop. In the end, there is only one Bitcoin and forks are only a natural thing that occurs since the code is free for the public to use and modify. If Bitcoin were controlled by a lawsuit-happy, authoritarian entity, Bitcoin would not be appealing to the freedom-minded users of the currency. Instead, the cryptocurrency community is free to develop, improve, and share their creations with the world.

Play it Safe.

Of course, just like any investment, you shouldn’t put all of your eggs in one basket. If Bitcoin once again decides to fork, don’t dump one coin to put it into the other; you should maybe consider embracing both coins so that you can make your Bitcoin stash future-proof if the market decides to turn one day. Don’t panic sell when there is a new fork in the making and don’t make outrageously large investments that you cannot afford.