If you have been following Bitcoin, you might be aware that the Bitcoin network is estimated to go through a hard fork around November 14th. A fork happens when the Bitcoin community is divided on the future of the underlying protocol. Bitcoin is a protocol similar to http for the internet and it needs a mechanism that dictates the future of the protocol. When a company decides on what needs to be done for the future, the governance mechanism is undertaken by the top management such as the CEO and the board members.
But how does governance happen for a decentralized, open source project that is not controlled by any single individual or entity but involves voluntary participation from all participants involved such as exchanges/miners/users/investors?
Hence, Bitcoin goes through scaling debates because it is highly improbable that everyone feels the same way about the future direction of the protocol. Even though everyone in the community wants Bitcoin to become a stronger protocol, differences could arise in the future vision, differences in what technologies should be implemented, and differences in how the project should shape up.
In bitcoin, this differences of opinion leads to a split or a fork. People who want to follow different rules than the existing rules decide to follow a different chain. The new chain develops a price of its own, basis how users value it. Forks require consensus which means all or a vast majority of the network’s participants have to agree with the changes. The network’s participants who decide to follow a different fork might suffer a financial loss as they take a risk and in this way, the blockchain governs itself.
Forks can be confusing for non-technical investors but investors who buy bitcoin with a long term perspective can benefit from holding both the original and the new hard forked coins.
1 BTC before fork = 1 BTC after fork + 1 new Hard fork coin
With time, each coin will gain it’s own network effects basis its features and the market decides which one they want to use by assigning a higher price to the coin. Users can continue holding any forked coins they receive so that they continue to benefit from the price appreciation of all forked coins.
At Zebpay, we have decided to publish our stance on hard forks which we will maintain for such future events
- Zebpay will decide whether to support the hard fork depending on various factors including but not limited to the technical feasibility and the price of the coins. The price in a way also indicates the support of the community.
- If Zebpay will decide to recover the coins, it WILL credit the coins to all the eligible users who held Bitcoin at the time of the fork once we support multi coins.
- If Zebpay chooses not to support a hard fork coin, it will not recover those coins.
- Zebpay will decide when it can credit the coins to the users depending on technical possibility and its current tech priorities. The time period can vary from a few days to a few weeks or even more.
- Zebpay might not give credit to users with a balance below a certain minimum amount if it is not possible to recover the coins. This limit will depend on each hard fork.
- Users who want to access the coins immediately post the fork should remove the coins from Zebpay to a wallet in which they control the private keys.
- Zebpay can decide to pause all its operations before and after the fork to ensure safety of user funds.
Source : Zebpay