Bitcoin holders risk losing actual BTC this weekend by attempting to sell coins from a fork that may lack any real value. Here is the process outlined. Bitcoin may undergo a bifurcation into two distinct chains in the forthcoming days. If it does, everyone who holds bitcoin ends up holding the same balance twice, once on each chain. Subsequently, an individual presents an opportunity to acquire the newly minted coins at a remarkably favourable price. They appear to be free money, making the act of selling them seem like a straightforward victory. However, by accepting the deal, the buyer is also entitled to acquire the seller’s bitcoin. Both chains initially accept identical transactions; thus, a transaction signed to send the fork coins can also be broadcast on Bitcoin. The buyer receives an equivalent amount in actual BTC at the same destination. This is referred to as a replay attack. The most prudent course of action for individuals lacking the ability to distinguish between the two balances is to refrain from altering the coins. A replay does not deplete the wallet. Only the coins offered for sale are in motion, departing as genuine bitcoin rather than the forked variant, accompanied by a transaction fee applicable on both chains.
Bitcoin developer Kevin Loaec, who flagged the risk on X this week, indicated that large holders could be targeted first. He stated that doing nothing will be a safer option, as coins that never move cannot be replayed due to the absence of a signed transaction to copy. The reason any of this is occurring is a proposal known as BIP-110, which aims to exclude images, text, and other non-payment data from bitcoin transactions for a duration of one year. Modifying the rules governing bitcoin necessitates consensus among miners, who indicate their agreement by marking the blocks they generate. BIP-110 requires 1,109 marked blocks from a total of 2,016 blocks, which constitutes 55% of the total stretch. A block represents the collection of transactions that miners incorporate into the ledger approximately every ten minutes. That route is closed; however, the proposal includes a second option outlined within it. From block 961,632, anticipated this weekend, computers operating BIP-110 software will dismiss any block lacking the requisite mark, irrespective of miners’ consensus. Nearly every block currently being mined lacks it.
Consequently, those computers will begin to reject the chain that is being constructed by the vast majority of bitcoin’s mining power. If some miners persist in constructing a BIP-110-compatible branch while others continue to mine bitcoin in the conventional manner, it is possible that two competing versions of the transaction history may arise. It experiences stagnation if there is no ongoing support for the minority branch; it halts progress. Such an imbalance renders a split plausible rather than inevitable. Miner signalling is currently positioned at approximately 2.6% as of Friday, according to trackers. That node share does not translate into mining power; however, with signalling this low, a minority branch could produce blocks at a sluggish pace or cease advancement entirely.
Consequently, should one arise, every bitcoin holder will initially possess an identical balance across both chains. The second copy may hold minimal or no value, yet an individual might still express interest in purchasing it. Separating the two balances presents initial challenges due to the absence of automatic replay protection from the fork. BIP-110’s actual restrictions on transaction data will not be activated until block 965,664, which is anticipated to occur around the beginning of September. Prior to that point, holders would be required to intentionally generate coins that are present solely on a single branch before engaging in secure spending. Timing is contingent upon the speed at which blocks are discovered, thus the mandatory-signalling window may commence a day earlier or later than the present projections.