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Can some explain the Bitcoin split and Bitcoin Cash to me

Discussion in 'General Discussion' started by petesede, Aug 20, 2017.

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  1. petesede

    petesede Site Manager

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    Like I am a 3rd grader. I have a good understanding of bitcoins, and even stock splits.. But I read an article about Bitcoin splitting into Bitcoin Cash.. but it makes no sense to me since when a stock splits, it usually has a price of a half of what it was before the split. So you have a $100 stock, and then you have 2 shares worth $50 each. Bitcoins did their split at the beginning of this month, but the price went up, and then the price of Bitcoin Cash is also up to almost $1000.... and I am confused LOL
     
  2. oportosanto

    oportosanto Moderator Staff Member

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    Yeah, what I know is what @RyanWeb told me. Basically everyone holding BTC got bitcoin cash when the fork happened. As simple as that. Then everyone sold the bitcoin cash making it's price drop, and bought BTC, making BTC value skyrocket. LOL.
     
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  3. petesede

    petesede Site Manager

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    Yeah, that makes more sense. The confusing part is they keep calling it a split, trying to compare it to stocks. But with Bitcoins, the price of bitcoins was never cut in half, they just gave a bonus amount of this new cryptocurrency.
     
  4. oportosanto

    oportosanto Moderator Staff Member

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    I am not an expert either, but I believe the fork here was something technological, to make the bitcoin chain even more safe. Not entirely sure though.
     
  5. petesede

    petesede Site Manager

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    Ah, and I heard it was about speed. Something about the BTC chain being only 2mb but the new bitcoin cash being 8mb...

    I put some money into bitcoins, but I waited until after the split because I wasn´t entirely sure how it was going to work. So I made some money on the surge of bitcoin price, but missed out on receiving the free bitcoin cash.
     
  6. oportosanto

    oportosanto Moderator Staff Member

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    Yeah, if you bought it right after the split it has valued more than 1k already right? Have you used coinbase to buy your BTC?
     
  7. RyanWeb

    RyanWeb Administrator Staff Member

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    Bitcoin did not actually "split" as the word would make you think, but someone created a new coin, using a mirror of the blockchain to date. At the date that it "split" was, the new coin copied the old chain information and then "split" into its own, separate coin. So there is the original blockchain, and new the one (bitcoin cash) the new blockchain is a mirror of the old one (Bitcoin), up until the date that it "split off" and became its own coin (Bitcoin Cash).

    That's why everyone who held Bitcoin when the "split" occurred also owned the same amount of Bitcoin cash (only worth less in USD). Yes many people then sold their Bitcoin cash for Bitcoin, to multiply their bitcoin almost completely free.
     
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  8. oportosanto

    oportosanto Moderator Staff Member

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    Almost sounds like a plot for a science fiction movie, except it went straight into your pockets. :)
     
  9. petesede

    petesede Site Manager

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    Yep, that was always my reason for confusion, I just have too much experience in the stock market so my brains sees a term and automatically gives it a definition.

    I used to own Micrsoft back in the day ( early 90s ) and it actually at one point had a split, and then regained all of the value within a year.. so you basically had a share at $100, then the next day two shares at $50, and then 12 months later 2 shares at $100 again.

    Bitcoin continues to do amazing, it would be nice to see another country besides Japan pick it up as an official currency.
     
  10. oportosanto

    oportosanto Moderator Staff Member

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  11. petesede

    petesede Site Manager

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    Of course it is not the official currency of Japan. But it is recognized by japan as a currency, which means it is now legal for banks there to offer to convert it inside the bank, something you cannot do in the USA and EU. It is a weird middle-ground for Bitcoins, since one of the purposes of it is to keep the gov´t out of your wallet, but at the same time it probably can´t go mainstream without some level of security from gov´ts and banks so that mainstream ( non-geeks) will trust it.
     
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  12. oportosanto

    oportosanto Moderator Staff Member

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    Well, making it available to buy from the banks would make it really simpler for me! At the same time, I do wonder what fees the banks do charge to buy them though lol.

    Where do you buy your bitcoins? Any idea what company has the best fees?