Another weekend, another fork. You know how the song goes, Everybody Wants to Rule the World.
(NOTE: Several countdown clocks still are showing SegWit2X data based on block 494784, which is no longer the correct one. 2X has not been activated yet at the time of this writing (block 494789). )
But hadn’t it been cancelled? Well, yes and no.
We now know it wasn’t really cancelled, but was simply a temporary strategic retreat. During the cancellation announcement, the kind folks behind the 2X fork were already planning last week’s attack.
All while telling the BTC community everything was ok:
BCH community needs to learn a hard lesson. Be friend with other competing coins, learn from them, and make BCH better. Don’t play hatred, don’t wish competing coins ill. Just wish and try to make BCH better.
— Jihan Wu (@JihanWu) November 10, 2017
Coincidentally, AntMiner moved their hashrate from BTC to BCH exactly while their CEO was tweeting this:
So Mr Wu was turning all his mighty AntMiners away from BTC at the same time he was typing “Don’t play hatred, don’t wish competing coins ill.”. In the meantime, the mainstream media attributes the BTC price dip to the SegWit2x cancellation (LOL. It’s the hashrate, stupid! – James Coinville).
The cryptocurrency community has learned to live with these frequent attacks, but usually not from the guy who controls tens of % of the world’s total hashrate. That is the main difference between previous attacks and last week’s Bitcoin Cash flippening attempt: moving the amount of hashrate Mr Wu controls does have significant impact on the whole network, as we saw reflected in the number of unconfirmed tx’s throughout the past week.
So what’s different this week? Nothing. Or, something maybe, but by now we should all know the drill.
Here’s How It’ll Play Out
They will fork 2X and the hashrate will probably, temporarily, move to the new forked coin. The Bitcoin unconfirmed transactions will soar again until the Bitcoin difficulty adjustment happens. Mining Bitcoin will then be more profitable until the next difficulty adjustment in 2016 blocks time – at this point hashrate returns to BTC and the new forked coin is probably dumped for lambos and moon.
The Bitcoin Cash attack from last week was very very profitable for those who risked going long on BCH in the days before the attack. So the 2X might end up being worth it for those living on the edge. If you’re a HODLer though, you probably want to turn your PC off for the weekend.
Coinbase Ignited this Week’s Concern
Although the fork is oficially “not happening” (nothing to see here, folks), Coinbase is taking some precautions. The Coinbase email is the source for all the rumours about tonight’s fork – in case you were wondering where this new wave of rumours came from.
They are working with two scenarios, one where the 2X network is completely unusable and another where there is actually some hashrate in the forked network, and will thus be usable. We’ll know soon whether the Peace & Love crew are moving their mining power to the new coin or not.
What to do now?
It depends. Are you in it for the long haul? Then HODL. Turn your PC and smartphone off, stop checking prices and go fishing. If you’re a value investor, there is nothing you can do, really, aside from building anxiety and watching speculators from both sides fight on social media.
OTOH, are you a trader looking for volatility and high adrenaline? Then by all means send your BTC to your favorite exchange now and ride the FUD! But remember, the institutional investors are moving to BTC, not any of its forks. While the Bitcoin Cash pump from $250 to $2000 was fun last week, for those who got in at the right time, this may not always be the case. The trick only works the first time – the 2nd time everyone knows about it and will be preparing accordingly.
If you do decide to trade during these high tides, make sure your BTC fees are adequate or your transaction will float in oblivion for days or even weeks. Here’s a nice chart of estimated confirmation times x fees. If you want to move fast in BTC, especially during turbulent times, be prepared to pay a hefty fee.
While investing, remember the Oracle of Omaha’s words of wisdom:
“You pay a high price for a cheery consensus.” – Warren Buffet