A fork is about to take place in Bitcoin next month at block 494,784 likely to fall on November 15th. Bitcoin has been through two of these before. Bitcoin Cash, and Bitcoin Gold (soon to release a network). With Bitcoin Cash and Bitcoin Gold Futures slipping in value, much of the canonical wisdom about these forks is that they are “nothing to worry about”, and they’re just extra free coins you can sell if you want.

I am by no means an insider, but there is something different about the upcoming S2X/S1X fork.

Proponents of Bitcoin Cash

Bitcoin.com says that “Bitcoin Cash” is the real bitcoin .

. The largest mining pool and manufacturer of mining equipment (BitMain) only accepts Bitcoin Cash now.

and manufacturer of mining equipment (BitMain) only accepts Bitcoin Cash now. Craig Wright who claims to be Satoshi says Bitcoin Cash is the real Bitcoin.

says Bitcoin Cash is the real Bitcoin. Roger Ver, AKA “Bitcoin Jesus” has been promoting Bitcoin Cash like crazy. When asked about Bitcoin Segwit 1x / 2x, he has said he doesn’t really care, since Bitcoin Cash is the real Bitcoin. He also announced that Bitcoin Cash is “equally exciting” as starting a new sovereign nation.

has been promoting Bitcoin Cash like crazy. When asked about Bitcoin Segwit 1x / 2x, he has said he doesn’t really care, since Bitcoin Cash is the real Bitcoin. He also announced that Bitcoin Cash is “equally exciting” as starting a new sovereign nation. Billionaire Calvin Ayre is throwing support behind Bitcoin Cash.

The New York Agreement

Earlier this year, a Bitcoin Core developers proposed “SegWit” as an upgrade feature to Bitocoin. The feature need a 95% miner signalling threshold to activate, but was stuck at just 30% for many months.

Finally, Barry Silbert and DCG were able to arrange for a compromise. 80–90% of the miners agreed to signal to activate SegWit in exchange for an increase of the Bitcoin block size to 2MB in mid November.

Notably absent from signing the agreement was Blockstream and the Bitcoin Core developers.

SegWit activated a few months ago, and now we are about to engage in the second part of the agreement with Bitcoin core supporters encouraging all parties to simply renege on the agreement and not increase the Block Size to 2 MB.

Any such change to increase the block size, they say would not be the “real” bitcoin, and no matter how many users or businesses support it, or how many computers mine it, it will not be Bitcoin to those who follow the Core development team’s vision of Bitcoin.

What happens when 80% of miners stop mining Bitcoin 1MB blocks?

Blocks will be mined at a slower rate. It might be hours between each block. What if some Miners decide to attack one of the chains? It could be even slower. In an extreme case, a 51% attack could mean that miners force only empty blocks on a chain, meaning everyone’s coins are stuck.

Perhaps miners might let some transactions in at really high fees. Imagine transaction fees as high as $1,000 while you wait for that one block every 3 hours and hope to get in as the market price falls.

In addition, with no replay protection, all transactions on the S2X chain will get replayed on the S1X chain and vice versa, causing further demand for block space.

Coinbase customers haven’t had access to their Bitcoin Cash

If Bitcoin Cash becomes the dominant chain in market share, this has little effect on long term Bitcoin holders who didn’t sell their Bitcoin Cash. For Coinbase users, they won’t have access to move their Bitcoin Cash until January.

If Coinbase customers are told that Bitcoin legacy is slow with expensive blocks and only worth 10% of Bitcoin Cash which has fast blocks and only 5 cent transactions, many customers will accept Bitcoin Cash as the new Bitcoin.

Why “Sell your free coins” is horrible advice

People assume that if they sell their free Bitcoin Cash coins, it lets them earn an extra 5% more Bitcoin, and eventually, all of the value will go back to the main chain.

There is a real chance here that Bitcoin Cash becomes the main chain.

When Ethereum and Ethereum Classic split, most of the value went into the Ethereum blockchain because that was the chain that most of the token holders supported. However, in the case of Bitcoin vs Bitcoin Cash, we know that some very large stakeholders prefer Bitcoin Cash.

In order to start transferring value from one chain to another, to make the math simple, if Bitcoin Cash is 5% the price of Bitcoin someone who sells 1,000 Bitcoin could buy 20,000 Bitcoin Cash. And remember, just like with Bitcoin, there can only ever be 21 Million Bitcoin Cash. Do you like Bitcoin and wish that you had 20 times your current amount? That could be possible if the market flips as dramatically as I believe possible.

Whatever happens, you will hold as much Bitcoin as long term Bitcoin holders if you hold an equal amount of Bitcoin and Bitcoin Cash on November 15th in secure private keys that you control. I believe this is the safest option for long term Bitcoin believers.

Possible downside to holding your own private key in this case

If the legacy Bitcoin price starts crashing while the transaction fees go up to hundreds or thousands of dollars, you may not be able to afford the fees to get your bitcoin on to an exchange to try to sell it for USD or Bitcoin Cash while the price falls.

The choice, of course is up to you. If you hold your own private keys, you will have the most flexibility to do whatever you chose … provided there are any blocks for you with space them.

Disclaimer: I hold Bitcoin and Bitcoin Cash.