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Forking with Bitcoin


Bitcoin has become more than a currency. Not only will the value continue to increase (or drop to zero, who knows...) but it also continue to pay out dividends. You might be thinking, "a dividend? But, sir? I understand how a currency can fluctuate in value... but how can a currency also pay you a dividend?"

Forks.

When Bitcoin goes through a "fork" a group of developers take Bitcoin's Blockchain and tweak it to make a Blockchain that they feel will be better suite the general populace. In order to do so, they must use the exact blockchain up until the time they choose to fork at.

Once they choose a block to fork at, and once Bitcoin's Blockchain reaches that block, a snapshot is taken. of the blockchain. Both Bitcoin's blockchain, and the forking blockchain will have an identical blockchain up until the time of the fork. So, if you are holding 10 Bitcoin when the snapshot is taken, you receive an additional 10 coins of the forked currency. Similarly, if you have .00000001 BTC (also known as a Satoshi) you receive .00000001 of the new coin. Whether the new coin is worth anything is up to the market.

So far this year we have had two forks; Bitcoin Cash, and Bitcoin Gold. The latest proposed fork is SegWit2x which has been talked about for quite some time. Forking shouldn't be frowned upon, as Bitcoin is not a perfect coin, and things will and should always face creative destruction. Forks are a bonus to Bitcoiners across the globe.

follow me on twitter @postmattern and @bitfuturist

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