Of course it's entirely possible that this person or group of people is just someone who bought B2X futures and is trying to push the price back up to minimize their losses.
(Skip to 30m) https://www.facebook.com/hackdays4all/videos/549774142034920...
I sense some uncertainty from Coinbase on what they want to do next.
edit: also interesting that the price for segwit2x futures has increased today to ~$380 after a low of $198
May be outdated now that 2X has been called off
Everything else is just supply and demand, ie what's the market-clearing price for 1 BTC and for 1 BCH and how does it compare to before.
However, this is not always the case - due to people thinking they can get 'free coins' from the other chain (price goes up), people being afraid of a fork (price goes down), etc
I guess the closest comparison to bitcoin is; oil price is at $60 / barrel today and speculators believe there is a 30% chance that they mis-estimated the number of barrels by 100% - but you won't know for sure for another 3 months. What's should the price of oil be tomorrow?
There was an interesting situation after the fall of the Soviet Union. Because most of the states didn't have economies strong enough to support their own currency, they remained a unified currency union as part of the CIS
The only problem was that each state then started printing the money like mad and then sending it to other states to be sold / traded. Some of the states then introduced what was a quasi two-currency system - to buy local currency or to exchange it, you required both the old Soviet Ruble and a new "permission" note from the state to exchange.
In theory this placed a cap on the inflation but the result was almost like a currency fork. A lot of these states ended up establishing their own currencies but still had problems with "swaps" from the old currency - so they were constantly reissuing new notes and new coins that needed to be exchanged - but many of the old notes or permission slips would have value on the black market
Another situation: in Brazil 90's, inflation was rampant and a new currency was being planned. But, until BRL was printed as the final currency, a few "forks"/new money were introduced, like URV (for one year), which set the market value for the new BRL, something like 2500:1 old-money:URV then 1:1 URV:BRL.
So, the analogy: a fiat fork did happen and a two-currency system was put in play, until the "miners" decided to ultimately put the hash power into just one fork.
When a cryptocurrency forks, you keep the same amount of coins on both sides but the 2 are wholly incompatible with one another.
A closer comparison is that you it's like 2 simultaneous futures, but with different consensus rules.
Typically people prefer to hold on to both coins after a split. So there's not actually that much sell pressure, meaning both coins can tend to exist together.
You can "cash out" whenever you like, obviously.
>Coinbase CEO Owns More Ether Than Bitcoin - Coinjournal
>Coinbase CEO Armstrong: Ethereum Scaling Better Than Bitcoin
Another example, The head coder on the "2x" fork has announced his own coin to ICO soon,
> Jeff Garzik, ... has seen its shortcomings firsthand. So he decided to create a better digital currency.
All the people pushing the 2x fork are very heavily invested in coins competing with Bitcoin. It's odd.
Their business plans are ruined if Bitcoin fees get too high. Note that 'extremely low fees' was the original selling point of Bitcoin which now has been ruined. So they were simply defending their businesses.
"The current launch plan includes launching on Ethereum chain, which will require paying ETH to obtain MTN tokens"
price starts at 1.67 ETH per MTN token
Remember Tezos? That raised a quarter of a billion dollars. There is way more money in making an ICO and saying "Bitcoin is broken! You need [new coin]!"
Brian makes money when you convert USD/BTC/ETH into USD/BTC/ETH. They announced they are adding more coins soon.
The main "2x" supporter runs "Grayscale Ethereum Classic Investment Trust" and tries to sell investors on a coin that nobody has ever used for anything ever.
The people who are "all in" on Bitcoin (the developers for example) think the "2x" fork is a terrible terrible idea. The people who are heavily invested in other coins want the "2x" fork to happen.
It's also hard to tell if Bitcoin developers are all in or not. Note that developers can have different interests than holders (eg. The want to get control of the codebase in order to get status and recognition & hopefully future consulting contracts). Note that the current bitcoin devs are mostly a new generation that got later in the game. Source & analysis about this point here http://hackingdistributed.com/2017/08/26/whos-your-crypto-bu...
this is 100% false, see this post:
You might notice that the table (conveniently) starts from 2010, after a good chunk of coins already has been mined. 2011-2012 is when a lot of the new devs came in which is the new generation, but it was getting much more difficult to mine then.
There's also so many problems with git commit history, so let's be honest here, ie. How many commits doesn't tell the whole story.
Hey, btw, my comments are just observations & not meant to criticize, sorry if you think I'm attacking you. I'm pretty positive about bitcoin and I think it's good that it can re-invent itself and find a good niche (the b2b / institutional market could be huge and certainly would see Bitcoin really growing up). The direction that the current team has chosen to lead it to has certainly paid off well. I sincerely wish the project more success in the future!
--Wants to fix it with a hardfork
--Wants to fix it with a new coin
I think the reason for your observation is pretty obvious
That does not explain why He still won't adopt Segwit (the network upgrade that recently took place) on his sites coinbase.com and Gdax, which allows for 4MB blocks and cheaper transactions for his customers, in a backwards-compatible way (a Soft fork). Instead pushes for a second fork, a "hard fork", which would require every user in the ecosystem to switch to a new software (who's author is pushing an ICO coin sale of his own!). A fork which every single bitcoin developer (except the ICO-guy who hasn't contributed in 2 years) strongly opposes.
Yes, not surprising that he blogs about Ether and owns more Ether and profits when people trade their Bitcoin into Ether on his sites. Same with the other big "2x" pusher who runs "Shapeshift" a site that turns your bitcoin into other coins and takes a cut%. These guys don't want to help bitcoin, they want to make money off the cryptocurrency space.
Let's say, I invested in the original Bitcoin. Then somebody who has the marketing resources to build enough interest in a new coin comes along and decides to fork. Because of the hype around the new coin type, enough people are willing to trade it after the fork.
I'm being given the same number of coins of the forked kind and the value of my original coins drops by the difference in value compared to the new coins (or around that).
If I'd rather only invest in the original Bitcoin, I'd have to sell the forked coins immediately and buy the original Bitcoin back just to keep my investment value the same.
If anybody can come along and fork:
That sounds like in the world of stocks, a competitor could come along and decide to split the stocks of MY company from the outside, driving down the price of my stocks (me as the company's owner or investor) and there's nothing I can do about it.
That's not really a good analogy. Suppose someone decided to offer one of their securities (or pay a dividend, or give some 'thing') to everyone who has one of your company's shares. All investors have to do is show a share certificate, and get a one-off gift proportional to how many they own.
If the new thing has value, your company's shares should all go up in value by roughly its value. Then shares which have already had the thing claimed, should go down by the same amount, leaving them roughly where they were before. If you decide not to claim the thing, you lose out by its value, but your original shares are still the same and you shouldn't have made a loss on them, just as a result of this split.
Of course, if the new thing is something which competes with your company, your company's shares might go down in response. But this isn't directly related to the value of a share in the new thing.
It's more like someone saying to all the shareholders of Apple "hey, you like companies that make mobile phones, and I've started a great mobile phone company, and I think it'd be great if you were a shareholder in my company too, so I've sent you some shares in my company too, I hope you like them!"
Is that a thing you could do? Yes.
Does it benefit you in any way? Probably not. There's certainly no reason to think it increases the value of your company.
Does it hurt Apple in any way? Almost certainly not. I mean, if everyone decided your startup was much cooler than Apple, then it might, but it's hard to see how you mailing strangers shares would bring that about.
A bitcoin fork is, in some ways, a little bit like a stock split or a dividend, but it's a lot more like someone randomly mailing strangers scraps of paper which are almost certainly worthless.
So far there's only been one successful hardfork of Bitcoin (Bitcoin Cash) in all its history. Anyone can try, but few succeed.
Having resources doesn't matter, it's a hype-based economy
Litecoin is a fork of the Bitcoin core codebase, but its blockchain is not rooted in the Bitcoin blockchain (i.e. Bitcoin owners did not automatically inherit Litecoin at the time of that fork).
Not a stupid question at all. The answer is: sure, anybody can start a new fork.
From a philosophical point of view, the alternative is that only a few designated somebodies can fork, which goes against the design goal of a having a fully decentralised network with no privileged nodes.
You can also see this as a distributed systems problem. A fork is just a divergence in the consensus layer. These happen all the time as short-lived forks when different miners produce different blocks with different sets of transactions. Typically, one of those forks gets abandoned immediately — only occasionally do you see a second block mined on the losing branch. In this sense, and from a technical perspective, the only thing that's special about the Segwit2X fork was planned for the coming weeks is that it would also change the consensus rules (by enabling larger blocks, up to 2MB from the current 1MB). Because the consensus rules change is a highly politicised issue, there's a distinct probability that whichever side ended up losing would decide to continue building on their own chain anyhow, thus effectively breaking the currency into two.
Prices of cryptocurrencies are very unstable even without any forks, so what you are describing doesn't make any sense.
When this goldrush started exchanges were the ones who made money so everyone wanted one.
Then came altcoins ...
Then ERC20 /ICOs...
Next up in 2018 - forks...
For that to happen the old coin type would have to lose in price at which the fork starts. How is the price for a coin of a fork determined?
- from the BTC point of view, there is 1 BTC both before and after the fork
- from the B2X point of view, there is 1 B2X both before and after the fork
- at any one time the value of 1 BTC is whatever people want to exchange it for
- at any one time the value of 1 B2X is whatever people want to exchange it for
- it just turns out that BTC == B2X before the fork
† Without replay protection, transactions may or may not be replayed, but the blockchains do differ.
Or in the opposite case, a fork could mean I lose money, just because somebody else decided to create fork?
This can make you end up with either a larger sum if you buy exactly before and sell shortly after the fork, or a smaller sum. Why should the sum be larger? Because there's people on both sides of the fence (the original coin and the forked coin) which think that their coin will "win the race", thus they include a certain additional, speculative value deducted from assumed future price increases into their estimates of the current value of their preferred coin. This drives up the speculative value of both coins simultaneously, and since either side focuses mostly on its preferred coin, driving up the perceived value of it, and neglects "driving down" the perceived value of the other sides' coin (because of disinterest or simply because driving down perceived value is much harder than driving it up, as humans are usually focused on positive things), this can result in a situation in which the mathematical sum of the speculative value added to both post-fork coins is quite a bit larger than the "combined" speculative value that was previously included in the original coin.
This is, in my opinion, exactly what happened with the Bitcoin Cash fork earlier this year. For this Segwit fork, people saw that the earlier fork "created value out of thin air" and thus began to incorporate some of this assumed future value into their value proposition of the coin pre-fork. This drove the price increase right before the fork (well, partly - there was also the CME news, which was a big driver, too). Funny enough, this time it probably won't work out as it did last time - the fork was "called off", and even if it would happen, it most likely will not result in a similar situation due to a) the "free money" having already been priced in during the time before the fork and b) the fork being a "colliding fork" this time, with both coins wanting to be "the real Bitcoin", having no replay protection or real separation of both networks. They wouldn't have coexisted for long - one of them would have "won" and captured the vast majority of value, while the other one would have diminished to the low 3-digit or even 2-digit price realm (effectively equaling a worthless coin, as in crypto, there is NEVER a really worthless coin in terms of having a price of zero - there is always someone wanting to pay some price, albeit very low, for anything that has "crypto" attached to it ;-) ).
In theory, yes, the value is split. The value is only derived from speculation, and the speculative value of the coin 1ms pre-fork must be the same as the value of the two coins 1ms post-fork, since otherwise people would simply buy immediately before the fork, and then sell immediately after, driving the prices to an equilibrium.
In reality, this is what has happened with this fork hype, people were buying w/ the idea of getting a 'free' coin, like how last time the value of Bitcoin + Bitcoin Cash was far higher than the original pre-fork value of Bitcoin. However, this has driven the price up, causing there to be even MORE hype, which will likely see the price of Bitcoin stay high, since it is now "trending up".
However in this market; market is irrational and it all depends on how the market is willing to price it pre/post fork. No, you won't wind up with the same dollar amount.
The same way the price of any coin is determined, the market-clearing price on exchanges.
There are going to be a lot of forks in the future.
I tend to agree. The problem, then, is what happens after 3 forks? 4? 10? We're going to keep increasing the number of crypto currencies we own and then we figure to figure out who supports what version of the currency we have to figure out how to cash out...
The entire idea of a fork sounds like an absolute nightmare. This is why I'm not putting any serious amount of money in crypto currencies.
This is an even bigger threat when you consider that they could be incentivized to follow a less valuable fork: exchange your new bitcoin for the old, convert all your users to the new bitcoin - you can now pocket the difference.
On the other hand you can also attempt to keep the airdropped funds from forks. Coinbase at first didn't recognize the Bitcoin Cash fork - it was only with pressure that they relented. But there have been other trusted holders who just "ignored" forks
I still haven't convinced my own brother that he needs to move his coins off-market - he said he'll "get around to it at some point"
Also have tech friends who keep coins in Coinbase/Coinbase Vault
So I understand why people do it. Ease of use typically outshines most security issues. Someone needs to figure out how to strike a better balance.
Also your should protect mobile/app wallet with a passphrase so it is safe if you lose it.
Or so they can?
And who decides?
Because these forks can have considerably favourable or negative outcomes for specific stakeholders, it's nary impossible to make the decision 'fairly' and this rather undermines the whole thing, no? And yes, I do understand that 'value' may be the same after such 'forks' but different post-fork mechanisms will imply different outcomes, surely.
Would it be possible for nefarious actors to wedge themselves into this process? ... Because we were all looking for the 'technical fault' in the maths/encryption, we possibly missed this aspect of risk?
This was not the case, nor has it ever been. There have been many consensus changes in the past, and bitcoin has had forks that were reverted by the bitcoin community previously. (See the bitcoin 0.8 fork).
There have been multiple revisions of bitcoin which would have changed the rules. They haven't yet resulted in a hard fork permanently (except for bitcoin cash) because people have updated before the new consensus rules were activated.
The whole point of decentralization was that nobody could control it, and devaluation was based on some algorithm, limited by tech.
If these rules can change, then the intrinsic value of BTC is truly up in the air.
What business would invest in using BTC as a currency knowing such things can arbitrarily happen?
The only reason people are investing in BTC is that the price is going up because demand is going up faster than supply is increasing. It's not really any different than if Confederate paper money became the hot thing, and stores started accepting it for payment, despite it not being legally currency. Since they only discover new sources of Confederate money every so often, if everyone wants to buy the stuff, the price is going to go up. If this keeps on happening year after year, people are going to start thinking it always goes up and buy it expecting it to go up.
BTC is already waning as a currency - fewer vendors using it.
As a 'store of value' it's really too volatile - there are just too many other, better options.
So what's left?
During the hyperinflation of the 90s, if I bought US dollars and sold them a month later, I could have a return in the double digits. That looks like a good investment.
An attempt to pretend that an inherently inefficient non-scalable technology can be made efficient and scalable.
They do not have a plan to add it to the trading platform, which is the only thing that would drive any real value to the Bitcoin Cash market. The only reason they added it at all is to allow people to take their coin and sell it on another exchange, to avoid lawsuits.
If they had any plan to add it to add it to the exchange. It would make much more sense to release it at the same time, thereby profiting off of the trading fees