Key conclusions
- As of Saturday, anyone who held bitcoin before the network split has a twin balance on the second chain. These coins are worth virtually nothing today.
- There is no cross-chain protection against repeat transactions, so your signature when selling free coins can be copied and move your real bitcoins.
- Coins that you don’t touch are safe. Without a signed transaction, there is nothing to copy.
- The side chain has mined two blocks and is standing, while the main chain has missed it by 111 blocks. However, the mandatory signaling runs to block 963 647, so the matter does not end today.
If you had bitcoins in your own wallet on Saturday, you now have a second set of the same coins. The Bitcoin network split at block 961,632 and a separate chain was created on which all pre-split balances look identical. It sounds like free money, and that’s exactly how it’s described on X. The problem is that trying to convert those coins into anything could cost you real bitcoins, worth about $65,200 each today.
Where did these new coins come from?
This is how a fork coin is created. The history of both chains is common until Saturday, so the same balance exists in two places at once.
Why selling one coin can trigger another
The mechanism is called double spend. For splits that are planned in advance, developers add repetition protection, a safeguard that makes a transfer signed on one chain invalid on the other. BIP-110 does not have such protection.
Developer Kevin Loaec described the scenario that worries me the most in all of this. Someone recognizes that he got something for free, sends the fork coins to the exchange and signs the transaction. The same signature is also valid on the mainnet. All someone needs to do is copy it and spread the word, and the same inputs will move on both sides. It’s not about remote hacking or taking over your entire wallet. It’s your own signature used twice.
Loaec pointed out that those with large balances are most at risk because it is their transactions that someone will watch most closely. Coins lying untouched do not create any signature, so there is nothing to duplicate.
The side chain froze, but the case was not closed
The new chain doesn’t move because of arithmetic. It disconnected at the beginning of the difficulty recalculation period and inherited the full mainnet difficulty of 127.48 trillion. It took with it a fraction of the computing power, but the task to be performed is identical. The OCEAN website showed 257 PH/s and no new block for seventeen hours.
Michael Saylor calculated that with such low power, it would take this chain about 25 years to first calculate the difficulty. This is his respect, not a reading from the minutes. However, the direction is difficult to dispute, because in the previous period, 51 blocks out of 2,016, or 2.53 percent, reported support, and in the current period, none of the 113 blocks of the main chain. Forced signaling runs to block 963 647, so miners can still add power and revive the side branch.
A rule without enforcement power is just lip service
I come back to this with every adjustment and the result is the same. The authors of BIP-110 introduced a threshold of 55 percent of miners’ support, and next to it they added a mandatory signaling window that starts regardless of whether the threshold has been met. The mechanism worked according to the letter and contrary to the intention. Nodes started discarding blocks that no one else was discarding and simply unsubscribed from the network.
Adam Back and Saylor warned against forcing change without broad support. Luke Dashjr argued that the temporary restrictions were necessary to ease the load on the nodes. The dispute was resolved by the miners who did not press the button, and that is the healthiest thing in this story.
What does this mean for you
If you keep your bitcoins in your own wallet, the best move is no move at all. Don’t transfer coins, don’t consolidate inputs, and don’t experimentally check whether something can be done with the forked balance. The sidechain has two blocks of history and no trading infrastructure, so there is no value there that is worth risking.
If you hold your coins on an exchange, the keys are still in its hands, and so is the decision. It is worth checking your platform’s announcements before you order a withdrawal in the coming days, because some exchanges suspend withdrawals during splits precisely to distribute the balances.
Also, keep an eye out for what appears on social media in the coming days. Free coins from a fork are a classic bait and I expect a flood of sites promising to help claim them.
