Pencil 1 August, 2017 into your diary. Then pencil it into the history books. Next Tuesday could go down as one of the most significant in the young history of cryptocurrencies.
Some people are terrified about 1 August. Some people don’t know whether to be terrified or excited. As for us, we’re thrilled, excited and optimistic. We think next Tuesday might be the best thing that’s ever happened in the world of crypto.
And today we’re going to tell you why.
Yesterday we explained that we believe you should be buying bitcoin for the long term. Not for quick gains that you’ll soon turn back into fiat currency. Following this plan could see huge financial reward, without the government getting their sticky hands on it.
We suggested that within the next 10 years one single bitcoin could be worth $625,000 — maybe more…maybe less. But in our view, bitcoin and other cryptocurrencies have incredible potential long term.
In fact, in my book, Crypto Revolution: Bitcoin, Cryptocurrency and the Future of Money, I explain exactly what that future potential looks like. And I explain how ‘crypto’ could be the basis for an entirely new, alternative financial system.
If you still haven’t downloaded a copy of my book, then what’s taking you so long? Click here to learn more about the future of money and get your copy.
Yesterday we also said that a historic moment is coming for bitcoin. And that historic moment will arrive next Tuesday. It will all come down to whether or not bitcoin will fork.
Now, for new people to all this, a fork doesn’t sound very historic. But what it means is that bitcoin could potentially split into two separate bitcoin blockchains.
Today you have one, tomorrow you have two
Let’s break that down a little further. Bitcoin as we know it today is one long chain of ‘blocks’. These blocks contain all the transactions that have ever occurred using bitcoin.
The best way to think of the bitcoin blockchain is like one incredibly long piece of chain. And every new block that is ‘mined’ is a new link added to that chain.
In a perfect world there would be only one chain, and that would become the dominant chain for the rest of eternity. But we don’t live in a perfect world.
Bitcoin, for all its promise, isn’t perfect either. Right now bitcoin is having some growing pains. In short, it needs to grow faster, but its current design doesn’t really allow for such rapid growth.
That’s why the bulk of the bitcoin community are trying to implement improvements to bitcoin. And they’re doing this through some nifty tech known as Segregated Witness (SegWit).
We won’t go into more technical detail on SegWit, other than to say it will help make bitcoin more efficient. And faster.
This SegWit is almost a certainty. Tuesday will confirm if it sticks or not. But not all of the bitcoin community are happy about it. A small collection of bitcoin developers would rather not have SegWit, and instead increase the size of bitcoin blocks.
Increasing the size will also mean significantly faster bitcoin transactions speeds, as the blocks can fit more data. This collective that don’t want SegWit and instead want 8Mb blocks, are now going by the name ‘Bitcoin Cash’.
What is likely to happen on 1 August at exactly 12:20 UTC is that the current bitcoin blockchain will split into two (fork) and we will have two ‘bitcoins’ — bitcoin (as we know it) and the new bitcoin cash.
Bitcoin cash will immediately implement 8Mb bitcoin blocks, while bitcoin will continue with Segregated Witness, and the two will go their separate ways.
Now, what does this mean for anyone that’s holding bitcoin right now? Well, if you hold the private keys to your wallet (which you should) then you can choose to follow either blockchain. In fact, if you’re holding your bitcoin in the right kind of wallet, then you might end up with double your holdings.
That means if you hold 1 bitcoin before the split, you’ll have 1 bitcoin and 1 bitcoin cash after the split. Right now bitcoin cash futures trade at around $410 — that’s free money.
To understand what wallets are, why you should be holding your own private keys, or even how to get bitcoin before 1 August, sign up to my new crypto advisory service, Sam Volkering’s Secret Crypto Network. We explain everything you need to know about bitcoin, crypto and what the fork means for bitcoin holders.
Now, we should also add that, while a fork is likely, there still needs to be enough miners to keep it going. Like any crypto, there needs to be a network of users and miners to sustain it long term.
But if there aren’t enough miners, then the new bitcoin cash might not last very long. But we don’t think that will happen.
The future is interoperability
We think the likely outcome is that we will end up with both bitcoin and bitcoin Cash on Tuesday. And that, going forward, both will exist much in the same way Ethereum and Ethereum Classic exist today.
We think that’s brilliant. That means we have two bitcoin projects existing, developing different advancements, side by side. It’s a bit of healthy competition, which we think will dramatically advance the development of both bitcoin blockchains.
Longer term, we even see the existing bitcoin becoming an even more valuable store of wealth. And bitcoin cash will act more like a ubiquitous payment method. It’s even possible bitcoin cash will be worth as much as the current bitcoin.
Two bitcoin blockchains might sound counterproductive, but it’s not.
Remember, we’re in the early days of crypto development. There are projects in the works now that are developing ways for different blockchains to seamlessly interact with each other.
That could result in blockchain interoperability. It means two separate blockchains securely exchanging crypto, without intermediaries. In other words you could move across all different kinds of crypto fluidly with ease and no cost. Can you change from one national currency to another as easily as that?
That future is coming. And it’s quite possible that it starts on Tuesday.