Bitcoin Forks and Meanings.

What is a Hard Fork?
Hard fork in blockchain technology is a radical change to the underlying protocol. A hard fork is a change to the protocol that makes previously invalid blocks and/or transactions valid. All users need to upgrade to the compatible version of the protocol. In case that does not happen and some nodes/users continue to validate by the old rules, and some users by the new rules, a so called Hard-fork(HF) will occur which means the network will be split in 2 chains as demonstrated on the picture below. New and old chain share the same transaction history till the block where the change of rules has occured. After that the chains are incompatitible and are running independently.

Are Bitcoin forks a scamm?
Technically the newly created fork is legitimate and you get the free coins. However these days there seem to be so many Hard forks, that are nothing, but a spin-off and the creators of the fork usually include a premine(grant themselves coins that did not exist prior to the fork) from which they can make a lot of money. Regardless of that, if you held the Bitcoin you get the coins for free and can sell them on the exchange or HODL.

Bitcoin Hard Forks as IFO – Initial Fork Offering Bitcoin Hard Forks that include a premine(artificially created coins that are allocated to the developers address) are sometimes seen as an IFO – initial fork offering and seems to be getting more and more popular in countries like China, where the ICOs have been banned and the Bitcoin IFO – initial fork offering can be seen as a way to raise money.

Should you be buying Bitcoin forksPersonally i do not see any value in majority of those newly created forks that are nothing else but copycats and quick way to raise A LOT of money with premined coins by the developers. I think they hold very little to no utility and are more than not pointless. The only purpose of it seems to be trading.

How do i claim Coins of a new Hard-forked Bitcoin In order to claim your coins, you need to be holding private keys to your Bitcoin wallet. If you are using an exchange, they are the ones actually possessing your private keys and actual ownership of the coins. Some exchanges do credit the newly created coins, but not all of them. It is recommended to send your bitcoins to a new wallet first, as your private key is the same on all forks. So let’s say you download a wallet for newly created Bitcoin fork, but it’s malicious and they steal your private keys- then they also have ownership over the real Bitcoin. So for safety reasons it’s always better to send your Bitcoins to another wallet and then export the old private key to the wallet supporting newly created fork of Bitcoin. Always do due dilligence – when it comes to money, there will be scammers preying on you all the time.

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