How to protect your bitcoin in a hard fork


I have had a few questions about protecting bitcoin in a hard fork from friends and colleagues recently. I have also read people asking this question in various bitcoin forums throughout the internet and while I have seen a lot of good advice out there, I have also seen some terrible advice.

Protecting your bitcoin has come to a head recently with a new bitcoin fork about to happen at block 494,784. I will try to spare you my opinion as to what fork is ‘right or wrong’ or any of the politics involved, I will just tell you how to protect your bitcoin by splitting them, as safely as possible, if that is what you chose to do.

I mostly want to help you understand how and why this method of spiting works so you can make the best-informed decision you can. My hope is that if you have already decided to split your coins I can point you to a method that is (relatively) safe and easy to follow so you don't end up being forked.

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Dissecting Bitcoin Block 420,000

Bitcoin Logo A few years back after the last halving I wrote an article shortly after the first halving block 210,000 was mined dropping the subsidy from 50 BTC to 25 BTC. Since block 420,000 was just mined reducing the subsidy from 25 BTC to 12.5 BTC I thought it would be an appropriate time to write a follow-up article with similar data for the most recent halving block comparing it to the previous one.

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Bitcoin Halving, what, why and what happened last time.

CAmount GetBlockSubsidy(int nHeight, const Consensus::Params& consensusParams)
    int halvings = nHeight / consensusParams.nSubsidyHalvingInterval;
    // Force block reward to zero when right shift is undefined.
    if (halvings >= 64)
        return 0;

    CAmount nSubsidy = 50 * COIN;
    // Subsidy is cut in half every 210,000 blocks which will occur approximately every 4 years.
    nSubsidy >>= halvings;
    return nSubsidy;

Simple right?

In just a few days we will have the second bitcoin halving event. Often in bitcoin we forget that not everyone is elbow deep in code all day, not everyone has been 'with us' for years and while we may talk about things like 'The Halving' we probably don't do the best job at explaining exactly what it is, why it is, what happened last time and what might happen this time.

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Physics and economics will [ensure] distributed mining... I'm not worried

200px-Arduino_ftdi_chip-1 Every now and then I read something that I think is inspired. In this instance I came across a reddit post by someone going by the handle of foolish_austrian.

His expertise and unique look on where bitcoin mining may be in the long term really captured my imagination and I thought readers may enjoy his far off vision of where mining may lead is in the future. So, without any more from me, here is the [not so]foolish_austrian;-

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Bitcoin Difficulty Reversing

As the graph below from BitcoinWisdom shows for the first time since just before ASICs (Application Specific Integrated Circuits) started to work on the bitcoin network it is possible that we may see a decrease in the difficulty of the bitcoin network. (This just in, it is official, the difficulty decreased to 40,007,470,271 a change of just under a percent. It may take some time for your client to adjust and the number to stabilise)

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BTCGuild may be closing

BTCGuildBTCGuild, one of the oldest mining pools that first opened on the 9th of May 2011 issued a statement on their websiteand redditthat the pool will be closing on the 30th of November 2014.

The full statement from the website follows.

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How I accidentally hacked the igot exchange

igot logo

I agonized a bit about if should post this, igot responded and acknowledged the problem but unfortunately they don't see it as a major issue at the moment saying "Since this is a small amount, this is not going to be investigated on priority."

My mind goes to MtGOX and Moolah though, both are recent examples of an exchange giving out more funds than the client had available (if we believe the official stories) and I think how things could have been different if the person that discovered a flaw in the exchange had, instead of doing what he/she did, informed the exchanges of the problem so the issue could be fixed.

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New Zealand Exchange hacked, 39 bitcoin stolen.

BCLogoNew Zealand bitcoin exchange site has been taken by the administrator leaving the message " under maintenance. Apologies for the inconvenience (contact(at)".

It seems that last monday at 3am New Zealand time 39 bitcoins were transferred from the exchange by an unknown party.

Bitnz …

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