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Bitcoin Hard Fork: to be, or not to be

Bitcoin Hard Fork: to be, or not to be

Last Friday night, July 21st, the majority of miners (about 90% of the network capacity) stated their support for BIP91 protocol.

It means there might be soon no need in activation via BIP148 protocol (UASF), as is fully compatible with BIP91, and SegWit will be also activated successfully.

If the vast majority of miners will eventually endorse the valid chain in bitcoin blockchain (that a priori supports SegWit), final activation of this solution will take place somewhere around the end of August. However, there is no 100% guarantee that it will be activated.

Some experts say that miners, who voted for BIP91, did that for their own benefit, effectively sabotaging the expansion of the network. But if support for such decision will fade, then the process of reorganization will fall into chaos, to say the least: miners might stop supporting BIP91, and put the blame on supporters of the BIP148. As a result, there will not be an overall support of network reorganization. Very soon we will see if that forecast materializes. For now, market reacted to the news quite positively and gave boosted the Bitcoin price up to $ 2900 during the same night of July 21.

Anyway, even as probability of separation remains small, it is better to take all the necessary steps to hedge the risks and prevent losses of your digital assets. For this type of investments, it is a good physiological aspect – keep as many bitcoins as you can allow yourself to easily lose in case of market disturbances. If you are not ready for such a risk, it is better to transfer all funds to fiat money, at least for a time.

If you are still willing to hold your online investments – make sure that you have full access to your private keys and that they are rock-solid safe. It is highly recommended not to keep your Bitcoins at exchanges, especially in high volumes, for the time of this network uncertainty.

Below we provide several secure solutions for storing your Bitcoins.

The first one is to create a wallet with a full node – this means you will have a complete chain of transactions from the very first day of network existence. It will be downloaded to your hard drive – it is currently more than 65GB of data, so keep it in mind. Bitcoin Core or Bitcoin Knots will provide you with such wallets.

The second solution is to store bitcoins at so called cold storage wallets. These are high security wallets that ensure safety of your investments. There are many solutions on the market, but the most popular ones are Trezor and Ledger. Such wallets generate a 256-bit secret key (Seed) upon connection, based on which all of your other security keys will be generated for each address. The secret key consists of a sequence of 24 English words that must be written down onto your card stored securely. In case of any disruptive events, you will be able to easily gain access to all of your other wallets with the help of this master key.

The third solution is to create a real, hard paper wallet. It is a document that contains copies of your public and private keys for your Bitcoin-wallet.

What option to choose is up to you, but always remember to take all precautionary measures to ensure safety of your private and public keys. Be the guardian of your own investments!