The Bitcoin Cash and how to be prepared for the new coin
The upcoming bitcoin hard fork has some users of the cryptocurrency concerned, however, a hard fork in crypto usually process smoothly and with a lot of options on how to prepare for the new fork coin. Users and holders of Bitcoin Cash have enough time to research and look into the usability of the new fork cryptocurrency.
A hard fork happens when miners and nodes no longer agree on the consensus rules of that particular protocol in order to achieve future goals. However, the fork does not stop the two forked cryptocurrencies from sharing the same unified Blockchain or the permanent ledger of transaction history that was previously made on the shared network. In technical terms, the hard fork toward the new coin existence starts after the first Block on that new chain has been mined.
The chain continues from here on as the community and the world at large further supports it and considers it viable. This is different from a soft fork where the code is simply used to build a different service, product or second layer solution with minor or major modifications. Examples of soft forks are the Bitcoin Segwit2x second layer and Litecoin Cash. The most recent hard fork that the community has seen so far is that from Bitcoin core to Bitcoin Cash that happened last year. The Bitcoin Cash blockchain is fairly identical to the Bitcoin Blockchain, with some visible and noticeable changes that the community has slowly developed over time with services, applications and its divisions.
The introduction of a new Bitcoin in crypto can face replay attack
With the split of two coins there can also be risks that comes with this like a replay attack which is when transaction details from one Blockchain can be used on the other. In the first phase of a hard fork, a transaction can be transmitted to a receiver on one Blockchain and then the details from that transaction can be used in order to receive the coins on the other forked chain without the senders permission. Essentially two transactions would be sent that mirrors each other, However, this can happen only within the first block and as the transaction would no longer go through to that address after the split. This is possible in theory but practically challenging with replay attack protection that the Segwit2x implementation introduced.
A replay attack is unlikely to happen, however, especially with a hardware wallet, the transaction or user can simply suspend all transactions within this short period of time until the network has forked. Some wallet services and cryptocurrency exchanges suspended all transactions automatically between this short period as well, if they have explicitly stated that it will support the fork. This is because of the push transaction feature in bitcoin. This can also be done manually by the user of the cryptocurrency if they are well educated enough of the risks of sending transactions during a fork. Currently, exchanges like Poloniex are committed to doing this fork and have begun with a pre-fork trading of the new coin.
What are your thoughts in the coming fork of bitcoin cash? Please feel free to leave your comments down below.