Many bitcoin enthusiasts are fully aware of the agreement that happened last week at Consensus 2017 and what it means for SegWit. For those that are unaware, BIP148 activates August 1, 2017. This is approximately 2 months away and gives you time to prepare. Essentially, this is a ‘User Activated Soft Fork’ (UASF) with SegWit support. To understand more, please click on the following links:
http://www.uasf.co/ - describes what the UASF is in more detail
https://www.weusecoins.com/uasf-guide/ - what you should do to protect your coins during the soft fork
What most people may NOT be aware of, is what will happen on the exchanges prior to August 1st. It is anticipated that bitcoin exchanges will provide customers with 3 distinct accounts for their bitcoin starting July 1st 2017. It could look something like this:
Getting ahead of the curve now and being prepared is highly recommended, especially for traders and users that have bitcoin in hot wallets, or those that are not running their own full nodes with the private keys in their direct possession.
Long Term Holders and Cold Storage
If you are a long term holder of bitcoin and using cold storage paper wallets and manage your own private keys, the BIP148 soft fork shouldn’t affect you at all. For those that are not very tech savvy and aren’t using or trading bitcoin regularly, now might be a good time to transfer your bitcoin to cold storage (ie. paper wallets or hardware wallets). I prefer paper wallets that I have generated offline and then track them with my Blockchain.info wallet. I rarely use the Blockchain.info wallet but it works slick for tracking my paper wallets using its ‘Watch Only’ feature.
To my knowledge not all hardware wallets currently support UASF-BIP148 so please, please verify with the manufacturer of your device! Trezor and Ledger hardware wallets do appear to support UASF-BIP148. You can check to see if your company or exchange supports BIP148 here: https://coin.dance/poli
If you are concerned and want to protect your coins for the safest possible outcome, then just move your bitcoin to paper wallets. There should be plenty of YouTube videos detailing how to do this and is probably the absolute cheapest way to protect your bitcoin without having to purchase a hardware wallet. That is why it is referred to as ‘cold storage’.
Note: Make sure you generate your paper wallets on a device that is not connected to ANY network especially the internet. I like to boot a computer using a Live Ubuntu CD/DVD or USB and then generate my wallets during this session. The operating system runs in RAM and isn’t installed anywhere. If on a desktop, disconnect your network cable before boot, or if on a laptop make sure you disable WiFi. If you want to print your paper wallets, use a printer that is connected by USB only! Most printers can be printed to using a recent version of Ubuntu without having to download drivers or install software (eg Ubuntu 16.04 LTS). Any USB device you use to store your paper wallets should only be mounted on a device that will never connect to the internet. When needing to retrieve your cold storage paper wallets, simply fire up a computer running a Live Linux CD/DVD or USB and then plug in your USB drive that stores your paper wallets.
Paper wallets can be generated offline using: https://www.bitaddress.org – Any good youtube video should show you how to do this.
Bitcoin Price, FUD and Profits
The next few months could see some wild fluctuations in the price of bitcoin. I suspect that the FUD will spread like wild fire and allow the knowledgeable to swoop in and scoop up bitcoin on the cheap. For those that are educated and understand how this soft fork operates, they will be able to trade and spend without any fear at all. I believe the soft fork will complete without any problems but anything is possible. Best to be as wise as serpents. :)
It also wouldn’t surprise me to see some of the alt-coins appreciate in value in relation to bitcoin. Those that don’t have or use cold storage may possibly just convert their bitcoin to alts and wait for the dust to settle once the soft fork is complete. Either way there is plenty of profit to be made.
I’m bullish on the long term outcome of bitcoin and I believe this soft fork is beneficial for the overall health of the bitcoin ecosystem. I currently run a full node and signal for UASF-SegWit-BIP148. If you operate a bitcoin full node and believe in the majority rule you may want to signal your support as well. Just be aware, signalling doesn’t mean your node is BIP148 capable. Please refer to the links above to learn more.
Don’t panic, don’t fear and simply educate yourself and keep your bitcoin safe. In another 6 months the bitcoin price will probably be much higher. When things like this occur in free markets is when some of the greatest profits are made, and be cautious with who you follow on the internet for advise. I can guarantee they’re just chomping at the bit to get BTC on the cheap! Don’t let them scare you.
Disclaimer: This article is my opinion and not financial advise but for educational purposes only. You alone are responsible for your own financial well being.
UASF is a hardfork in disguise. Not to mention the Sybil-esq signaling method... The miners will decide.
If the chain splits it splits I guess. We'll know in a few months.
In the meantime I'll just keep hoarding my bitcoin in cold storage. If there is a hard fork I'll then transfer my cold storage bitcoin to the chain I believe offers the most security and utility for me.
Thanks for posting.
Very informative. Thanks!
Glad to hear you found value in it. Thanks for reading.
Cheers :)
We need bigger blocks today - we will fix mailability as soon as we can.
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is bitaddress 100% safe for the USAF, so I won't be on the wrong fork or something??