The virtual cryptocurrency Bitcoin has come to the rescue of many poker fans who would otherwise find it difficult to successfully deposit and withdraw money at their favorite real money online poker sites. Fears of a possible upcoming hard fork in BTC are causing some worry in the player community though. If Bitcoin splits into two currencies, then users who have not taken the proper precautions may be unable to access some of their coins either for the “legacy” Bitcoin currency or the new coin, which is called Bitcoin Cash (BCC).See comments section below for most recent updates
The hard fork is scheduled for Tuesday, Aug. 1, 12:20 p.m. UTC (8:20 a.m. ET). Assuming everything occurs as planned, future transactions will be divided between the old Bitcoin that we're familiar with and the new Bitcoin Cash. The pre-existing blockchain ledger will serve as a starting point for both types of transactions, but from the time the hard fork is activated, there will be two blockchains in concurrent operation. Basically, all bitcoins will be duplicated, and their owners will then possess identical quantities of BTC and BCC. Everyone will be able to spend these two distinct virtual coins separately, and transfers involving one of the currencies will have no impact on the other.
The problem lies in the fact that most wallets and exchanges are going to support only one of the rival digital money systems. For instance, Coinbase says that it will not be compatible with Bitcoin Cash, which it refers to as “UAHF coins.” After the fork, coin owners on Coinbase may therefore be unable to access their balances of Bitcoin Cash. We don't know which of BCC or BTC will eventually be considered the “real” Bitcoin, even though it will probably be BTC, so holding onto only one of them carries a significant risk of losing considerable value. Although unlikely, it is imaginable that both currencies will enjoy a healthy and long lifespan, in which case everyone without access to both of his or her divergent coins will be essentially throwing money into the fire.
The reasons for this seemingly counterproductive and confusing rift lie in the history of Bitcoin. When it was first developed by Satoshi Nakamoto (a pseudonym) in 2009, nobody could have foreseen how big it was destined to become. While the initial BTC technical specifications were more than adequate while this form of virtual cash was just a plaything for hobbyists, they've run up pretty close against their limits now that Bitcoin is a serious financial tool employed by millions around the world. Frequent network congestion has led to increased miners fees and unpredictable transaction processing delays.
Almost everyone agreed that something needed to be done, but there wasn't a broad consensus on exactly what that was or how to go about doing it. Financial institutions, exchange owners, miners, and regular Bitcoin users all had differing ideas on how to proceed. While the intricacies of the conversations among these disparate groups are too labyrinthine and convoluted to thoroughly describe in less than a few thousand words, suffice it to say that we've seen proposals, rejections, revisions, conferences, agreements, changes of heart, negotiations, renegotiations, and acrimony.
A broad group of stakeholders finally agreed on a proposal called BIP91. This would eventually deploy the activation of Segregated Witness (SegWit), a clever way to conduct Bitcoin transactions more efficiently by moving some of the transaction data off the blockchain. SegWit wouldn't break the existing rules that miners all agree to, so it can be included in a soft fork, which won't disrupt the existing Bitcoin ecosystem. BIP91 has easily surpassed the 80% threshold of miners indicating support for it, so it's now considered locked in. Assuming further acceptance milestones are reached within the next few weeks and months, Segregated Witness will eventually go live.
There are some, however, who feel that the innovations encapsulated in the Segregated Witness code base don't go far enough. They see it as undoubtedly ingenious but nevertheless insufficient. Without fundamentally altering the underlying structure of Bitcoin, they contend, SegWit is nothing more than a temporary stopgap. These mavericks believe that nothing less than a boost to the hard-coded 1 MB block size limit will suffice. Led by Chinese Bitcoin mining and exchange consortium ViaBTC, they have begun the Bitcoin Cash project, which will raise this limit to 8 MB. The larger block size will allow more transactions to be processed within a single block, removing many of the constraints under which Bitcoin now operates. Unfortunately, such a drastic change to the Bitcoin protocol cannot be executed without breaking compatibility with miners who don't agree to support it. This is why Bitcoin Cash will cause a hard fork and lead to two separate currencies.
As long as you retain the private keys to your bitcoins, the upcoming hard fork should pose no threat to you. As we mentioned before, you'll be credited with matching BCC for the number of BTC you have. That said, you might have to find a new exchange or wallet software to begin trading with your duplicated coins, but you'll be able to import your private keys and thus access both your Bitcoin Cash and your traditional Bitcoin balances.
If you don't have authority over your own private keys, then it's vital that you move your bitcoins to a wallet that does grant you control of them before Aug. 1. Exchanges like Coinbase, one of the most popular exchanges in the world, does not allow it's customers access to their private keys since it acts as custodian of a users cryptocurrencies. Furthermore, neither do poker sites that denominate balances in BTC, such as Nitrogen Poker and SwCPoker. You ought to therefore withdraw your balances from all such accounts immediately, and place them where you can easily get at your private keys. There are many wallets that allow you to do this, like:
Each of these wallets allows you to generate recovery phrases, which you should WRITE DOWN OR PRINT OUT AND KEEP IN A SAFE PLACE. These backup mechanisms will allow you to recreate your wallet if you should happen to lose your login info/PIN code. For more detailed info on how to deal with the Bitcoin hard fork, look at this FAQ on Reddit.
It's advisable to conduct all the transactions you wish to complete at least a few hours before the Aug. 1 fork time. The sooner you transfer your bitcoins to a wallet that lets you control your private keys, the better because there may be unexpected network delays as many people hurry to move their bitcoins in advance of the hard fork. Similarly, you ought to let your coins sit for a few days afterward to see how everything looks before you make any moves.
Please note that money stored at poker rooms that run on USD or some other fiat currency won't need to be withdrawn for this reason even if it was originally deposited through Bitcoin. Such funds are converted to and from crypto-currency at the time of deposit or withdrawal, and they aren't subject to the vagaries of exchange rates except when you elect to add or remove them from the site. Just sit tight, and wait for the BTC/BCC matter to resolve one way or the other. Then you can make your cashout requests with full knowledge of the new circumstances.
If you're a crypto-currency poker player who doesn't know much about what goes on under the hood of Bitcoin, then you might be worried by all this talk of impending modifications to the BTC platform. Fortunately, you don't need to really understand all the technical details in order to take sensible safety measures. Follow the instructions we've outlined above, if necessary, to secure your private keys and reserve for yourself full rights over the BTC and BCC that you legitimately possess. If this whole article is beyond your ken because you don't know how to use Bitcoin for online poker, then you can read our step-by-step instructions on how to set yourself up for Bitcoin poker. Right now is definitely not the time to start investing in BTC, but it can't hurt to open up your wallet and exchange accounts today as long as you don't acquire any bitcoins until the fork is completed and the fallout has cleared. If you're interested in learning more about the best bitcoin poker sites, or just real money US poker sites in general, we have plenty of good advice for you in the linked articles.