How to Profit from Bitcoin Forks by Simply Holding a Bitcoin Balance
In August 2017, bitcoin underwent the first major hard fork since it was released back in 2009. A fork involves the splitting of the currency into two separate entities. While the original bitcoin remains unaffected and continues to perform without any problems, the forked currency is led by a different vision and motivation than the original.
It is important to understand that recovering your forked bitcoin wealth involves certain risks and may or may not be worth the time and effort. Regardless, if you held even a singular bitcoin in your wallet prior to August 2017, you are entitled to a good $2000 in ‘free money,’ and that is only as of the time of writing this article. As more and more bitcoin forks are introduced, that number is only going to grow.
Bitcoin Forks… Again and Again
The most popular of all forks is probably Bitcoin Cash (BCH), a cryptocurrency that attempts to overcome bitcoin’s problems of high transaction fees and scalability by increasing the block size limit. Bitcoin Gold (BTG) is another currency released in late 2017 and accounts for a rather large percentage of the total wealth offered by bitcoin forks.
Some of the bitcoin forks may lack an essential security feature, that is, replay protection. Given that you will need to give their wallet software your wallet’s private key, it is possible that they might be able also to wipe out any BTC balance you maintained there. Of course, the risk associated with such forks is much higher than the big name ones such as Bitcoin Cash. It is recommended to move all your BTC to a different wallet, one that is preferably SegWit enabled and thus, future proof.
Once you have done that, it is all a matter of choosing which forked cryptocurrencies are worth your time and effort. Every fork will have its own corresponding fork height, reward ratio and exchange availability that you will need to consider and study in detail. Fork height refers to the date and time the fork took place, which means that all BTC wallets at the time were credited with the corresponding currency. Reward ratio answers whether the forked coins were handed out at a ratio of 1:1 or otherwise.
Determining your Balance from Forks
Whether the coin you want to claim your Bitcoin Pizza, Super Bitcoin, Bitcoin King or the tens of other forks, you can find your wallet’s total balance at a service such as FindMyCoins. It totals your fork balance for each currency in USD.
Of the many methods available, Bither is perhaps the most recommended service, primarily because it is featured on the bitcoin.org website. BitPie will also be used to deposit these forked coins into their respective wallets. It is recommended to use both these apps on Android. However, other alternative platforms exist.
Moving forward with the Bither app, paste your private key in the “Advanced Options” section. This will import your bitcoin wallet into the application. In the same section, tap on “Get Fork Coin.” Select the one you’re interested in, and then you will be prompted to enter a BitPie address. Assuming you’ve set up the BitPie app properly, paste the “Receive Address” in this area. And that’s it. You will receive the forked coins shortly.
Repeat the process as many times necessary, accounting for all forks. It is important to note that selling the coins for USD or other cryptocurrencies will require you to find an exchange that supports the fork.
A Couple of Ways to Obtain the Forked Spinoffs
Another service that takes the hassle out of bitcoin forks is Walleting Services, which extracts nine of the forks for you and takes a ten percent cut. You must enter your private key for each fork you want to obtain (but first move your coins from the address associated with that private key), and enter a BTG, BCH, etc., address to receive your bitcoin spinoffs. You can find feedback on this service here.
For the technically minded, Bitcoin developer Jimmy Song outlines a safer method that requires less trust (or none at all), which involves setting up a two physical/virtual machines (one connected to the internet and the other not), running the core software and import the private key and broadcast the transaction on the first machine not connected to the internet. More details are found here.