A Bitcoin Beginner’s Guide to Surviving the Bgold and SegWit2x Forks
It looks as if Bitcoin will experience at least two more “coin-splits” soon, which (more accurately) will result in the creation of new coins. On October 25, Bitcoin Gold (Bgold) will split off from Bitcoin to create an ASIC-resistant cryptocurrency. A few weeks later, a significant group of Bitcoin companies wants to hard fork according to the SegWit2x plan as defined in the “New York Agreement” (NYA), which will probably result in yet another new coin.
Update: Many of these companies and the main organizers behind SegWit2x have by now decided not to move forward with their hard fork. Others may still proceed, however, so if you want to be on the safe side, the advice in this article does still hold up.
If this all plays out, there could be three distinct blockchains and three types of coins within about a month of publication of this article. One blockchain would follow the current Bitcoin protocol; for the purpose of this article, that coin will be referred to as “BTC.” The second blockchain will follow the Bgold protocol; in this article, that coin will be referred to as “BTG.” The third blockchain will follow the SegWit2x protocol; that coin will be referred to as “B2X.”
The good news is that each BTC will effectively be copied onto both the Bgold and the SegWit2x blockchains. If you hold Bitcoin private keys at the time of the forks, you should be able to access your BTG and B2X coins as well.
The bad news is that such forks can be somewhat messy and risky. If you’re not careful, it’s easy to lose your BTC or B2X, and maybe your BTG.
This guide will provide you with the basics to keep your funds safe during the upcoming forks and help to ensure you make it to the end of next month with your BTC, BTG and B2X intact.
Author’s note: If you want to play the markets as soon as possible and you are fine with taking risks, and/or you really know what you are doing, this article is probably not for you: it's a beginner's guide. Also please note that everything in this article is just advise, based on our best understanding of the situation. Much is still uncertain and subject to change.
Before the Forks (That’s Now)
First of all, be aware that coin-splits can be somewhat risky — especially controversial ones like the SegWit2x fork. While it seems unlikely for now, there is a chance some kind of cyber-battle will break out, perhaps even escalating to the point where all exchange rates drop sharply. If you want to make sure not to be caught in any crossfire, it’s best to not hold more value in bitcoin than you are willing to lose.
If you do decide to hold on to your bitcoin, make sure you are prepared before October 25, and preferably sooner. This is the day the BTG equivalent will be distributed to all BTC balances. B2X will follow a couple of weeks later, around mid-November (the exact date is not yet known).
If you are storing your bitcoins on an exchange, in a custodial service like Coinbase, Circle or Xapo, or on any other service that holds your private keys for you, you may or may not eventually receive BTC, BTG and B2X. This is not yet very clear, and if you want to keep storing your coins on such services, you should at least see if your exchange or custodial service of choice has made an official statement on the forks, perhaps on their company blog. If not, contact them to ask.
That said, if you want to be absolutely sure to be able to access your BTC, BTG and B2X, you should really control your private keys yourself. That way you don’t need to rely on any third party.
If you’re currently using a custodial service to store your bitcoins, you need to create your own wallet instead. Send or withdraw your bitcoins from the custodial service to this new wallet; this wallet then holds your private keys.
What kind of wallet you want to use is up to you. For this specific purpose it’s best to use a wallet that lets you easily access your private keys directly. (Some wallets make this easier for you than others.) But technically, any wallet that lets you control your private keys should be fine.
With that in mind, here are some basic solutions:
If you don’t care about transacting with BTC, BTG or B2X anytime soon, and really just want to keep all of them as long-term investments, a paper wallet is a good option. It should be noted, however, that this option is only really secure if you follow strict security precautions, which you can find here.
Regular wallets are about as secure as your computer (or phone). Since most computers and phones are not all that secure, these are not ideal for large amounts. With that in mind, all mobile and desktop wallets listed on bitcoin.org will store your private keys. Electrum is a good pick if you want easy access to your private keys directly.
A full-node wallet like Bitcoin Core or Bitcoin Knots is also a good pick, as it’s not too hard to access your private keys with these wallets either. As a bonus, these wallets give you a little extra security on the Bitcoin blockchain (shortly) after the SegWit2X fork, because these wallets enforce all of Bitcoin's current protocol rules. However, these types of wallets are more resource-intensive to use, compared to most other wallets.
Another option is to get a hardware wallet. Any of the hardware wallets listed on bitcoin.org will keep your private keys secure. However, these wallets typically don’t let you easily access your private keys directly. It’s not clear that all these wallets will let you access BTG in particular, and not all of them have given a guarantee for B2X either. So while these wallets will safely store your private keys, it could be a bit more tricky (but probably not impossible) to get ahold of all three coins later.
In any case: Be sure to make backups of your keys! Most wallets require you to do this when installing; don’t skip this step.
Shortly After the Bitcoin Gold Fork (and Before the SegWit2x Fork)
The Bitcoin Gold fork is sometimes referred to as a “friendly fork.” This is mainly because it has no intention of claiming to be the “real” Bitcoin, and it plans to implement strong replay protection.
In short, this replay protection means that you won’t accidentally send your BTG when you mean to send BTC (or the other way around). So even after you’ve spent your BTC, you can still access your BTG.
If you want to transact with your BTC before the SegWit2x fork, it could come in handy later to write down which of your Bitcoin addresses and/or private keys had BTG attributed to them — in other words, which of your Bitcoin addresses had any BTC on them at the time of the Bgold fork on October 25th.
But there’s no rush to actually access your BTG. In fact, it will probably take at least a week before this is even possible, and maybe longer. It’s therefore probably best to ignore this fork until after the SegWit2x fork. That way you’ll only need to go through the process of claiming all your new coins once.
After the SegWit2x Fork
Unfortunately, the SegWit2x fork could play out a bit more messily.
For one, several of the companies backing SegWit2x consider this fork an upgrade of Bitcoin itself. They therefore currently have no intention to adopt a new name for it. Some of them will call or list (what this article refers to as) SegWit2x and B2X, as "Bitcoin" and "BTC". Meanwhile, they might call or list (what this article refers to as) BTC as "B1X", or another ticker.
And of course, all coins will command their own exchange rates. So as different exchanges list a different coin as "BTC", the price for "BTC" could differ vastly across exchanges: they're actually different coins! You should therefore not buy or sell any coin listed as "BTC", unless and until you are very sure which coin your exchange lists as "BTC".
Additionally, it currently seems SegWit2x will fork without strong replay protection. This means that post-fork, BTC transactions and B2X transactions will look identical and could both be valid on both blockchains.
Therefore, spending coins on the BTC blockchain could make you accidentally spend the “equivalent” B2X on the SegWit2x blockchain, and the other way around. Instead of paying someone only BTC, you may unintentionally send B2X as well — or vice versa. The BTCs and B2Xs are initially “stuck together.”
To be on the safe side, you should probably not spend an coins after the SegWit2x fork at all. As explained below, you'll first need to "split" your coins.
Furthermore, some light wallets (mobile wallets) will display whichever blockchain has more hash power attributed to it. This means that the balance on your screen could be a BTC balance or a B2X balance, and there will be no way to tell the difference. (Even if the wallet says it’s a BTC balance!)
To be on the safe side, you should not accept any payments with light wallets, since you could receive B2X when you’re expecting BTC, or the other way around. At the very least, you should make absolutely sure that your wallet displays what you think it displays. (Wallets like Electrum and GreenAddress should display BTC as "BTC" regardless of hashpower distribution.) If you use a full-node wallet like Bitcoin Core or Bitcoin Knots and you want to accept BTC, that should also be fine.
Depending on how much hash power is dedicated to each chain, it is possible that transactions will confirm (significantly) slower than usual for some time and will require higher fees to confirm at all.
Claiming Your Coins
If all three chains survive, and you control your private keys, you should be able to access BTC, BTG and B2X around mid-November.
Claiming your BTG should be relatively easy, assuming there are wallets available for it. Most likely, you’d simply need to insert your private keys (or private key seed) into such a wallet.
However, there are some security and privacy risks in doing so. It’s too soon to tell exactly what these risks will look like as it’s unclear which wallets will support BTG. (It’s not even certain that any wallets will.) But in general, you’ll first want to move your BTC (and B2X) to new addresses or whole new wallets before accessing your BTG.
Since there’s no need to rush, it’s probably best just to wait on claiming your BTG until there is more clarity. By that time, Bitcoin Magazine will publish a follow-up article explaining how to do this.
Securely accessing and using your B2X (and BTC) might prove a bit more tricky, mostly because of the risk of replay attacks. This requires that the BTC and B2X are split from each other, which will be possible but could prove a bit complex.
Some wallets might split the coins for you, but it's too soon to know which wallets will. Additionally, exchanges will likely set up coin-splitting services and take care of most of this complexity behind the screens. You’d then just need to send your BTC or B2X to an exchange, and the exchange will credit your account with both BTC and B2X. (They should even replay the transaction for you to make sure they indeed receive both your coins and can split them for you.) There may also be other solutions to split your coins, but that remains to be seen.
By mid-November, there will probably also be dedicated wallets for both BTC and B2X. Of course, you may need to upgrade your existing wallet or download a new wallet. This also remains to be seen.
Further specifics on what to do after the forks will be announced on Bitcoin Magazine once the forks have occurred and we have a better understanding of the post-fork situation.
So, to Recap ...
1. It’s best to control your private keys yourself before October 25, and hold on to them until after the SegWit2x fork, mid-November.
2. To be on the safe side, avoid buying or selling any "BTC" and don't make any transactions shortly after the SegWit2x fork.
3. As the dust settles after the SegWit2x fork, access and split your coins. (How to do this will be explained on Bitcoin Magazine once there is more clarity.)
This article was last updated on November 12th. This article will be updated as the news develops.