Bitcoin Forum

Instead of keeping them in cold storage/private wallets because they get to dump the free coins earlier at the best price. Otherwise holders in private wallets will encounter many delays that will result in dumping the free coins for pennies/free.

I read everyone saying keep bitcoins in private wallets instead of exchanges as exchanges are riskier but when it comes to forks the exchanges are at a speed advantage.

What can be done in the future to prevent this and make it fair?

That was wrong on the ETC split and wrong now. People joining the trade now earn more dumping than the people who had BTC on exchanges and dumped as quickly as they could.

For many people that wanted to collect on the airdrop, they had no choice but to withdraw. Coinbase and Bitstamp, for instance, didn't credit people. So sure, if you had some coins on HitBTC or Bittrex, you could sell (on low volume only) for $1000 if you were lucky. But how much of your bitcoin are you really willing to risk in exchanges like that?

You don't need to hold your coins on exchange all the time to get benefits of early trading, you can just deposit shortly before the fork. Still, it's a risk vs reward, because other forks, especially those without replay protection, can cause technical difficulties that might lead to loss of funds of some users. I personally preferred to sell my airdrop BCH at lower price and not endanger my Bitcoins by keeping them on exchange, even though most people haven't encountered any problems this time.

I think it goes both ways, some people dont mind a bit of risk to get the reward of being able to trade first by keeping their coins on an exchange but at the same time a lot of people just want to take control over their private keys to ensure they are safe no matter what happens.

E.g. I took the risk thinking I was going to be OK because Bitfinex said they would have BCH support but in the end it came late and they credited at a rate of 1:0.85, I rolled the dice and lost, if I had of gone to Bittrex I would have done much better but thats all hind sight... at least I still have all my BTC.

Good point. The fact that all the trading for BCash is being done in exchanges only proves the insanity of the situation. Rushed amateur hour coders and their works are the laughing stocks of cryptocurrency.

This could be a thing that interest exchanges in the future. They will list any fork just to get the fees, and they will get more and more people depositing the coins there in-beforehand to be able to trade. I didn't think of this before. Exchanges must be so happy to list the segwit2x scam in the future if the morons involved in NYC actually go through with their stupid plan.

So not only we will face a big price crash, but we will see a lot of people risking their coins in exchanges.

Absolutely nothing will prevent this.

As a general rule, people who are not idiots will decide to keep their coins in a wallet where they safely control the private keys.

If they are idiots or they're willing to lose their money, they can freely store their coins on barely regulated exchanges for as long as they like.  But don't come crawling back when Bitfinex steals loads of your BCH.

First of all, big part of exchanges decided to not credit BCH to their users. This is why people had to move their btc out from exchange.
And personally, I wouldn't risk to keep all my bitcoins on exchange just to get free coins and dump it. Especially, shutdown of btc-e made me worried. We don't know what can happen to exchange, no matter how trusted it is.

How do you know the best price?

That's only the case if the exchange where you store your bitcoin support the fork. If it is not supported then you have to keep it in your wallet or move it somewhere else. And i don't trust exchange to hold my bitcoin in case something bad happen.

There is nothing to be done about it, and if you are a true holder then you do not care that an altcoin based on bitcoin is trading on exchanges, a holder is not going to risk his coins being seized or confiscated just to earn a few more cents that is not the mentality that a holder has.

no it does not encourage it.
keeping coins on exchanges was only one of the ways and only some of the traders did that, certainly not every one of them did this and certainly not normal users.
and as a trader you choose to take this risk. the risk of keeping your coins with a third party and do it because of the possible better reward. for example selling as soon as price hits the top or ever continue trading it because it has high volatility in the early days and that certainly is very profitable in early days.

and the risk doesn't stop there by the way. there is always the risk of exchanges messing up and lose the coins. it happened with ETH fork.

The free coins won't be dimoed like you say. Have you seen the graph ? Many people are buying. People will split their Bitcoin between the two currencies some even go all in. I wouldn't worry the future is secure.

Yes the exchanges rewarded people for their loyalty basically. I had half my funds in an exchange the other half in my private wallet.

What? And keeping your coins on an exchange like Coinbase resulted in you not getting any Bitcoin Cash!

The online wallets I'm aware of that have allowed people to sell or move their Bitcoin Cash is Bittrex and FreeBitco.in. (Pretty amazing that the latter is a player!)

The fairest market is one that allows people the most options...that's what we have today.

And by the way, it's not as simple as "you could have sold your BCH for $600 or $1000 if you held on exchange", because the price wasn't that high from the start. The price was gradually growing from 0.1-0.15 BTC after launch, so you had to wait some time before the pump, and I'm sure most people would have dumped quickly. And BCH markets weren't entirely closed, you could have deposited BTC, buy BCH at 0.15, sell it at 0.3 and get the profit, but if you didn't actually do it, than it means you had no confidence in BCH and would have sold it asap and ~0.15, which is close to what you could have achieve with depositing it to ViaBTC. So don't grieve about lost opportunity, it's almost impossible to trade perfectly. You still got some totally free money if you have sold BCH.

Coinbase actually turned and will you give you the BCH now instead of keeping it themselves :P

They have to wait until 2018(!) tho before they see their money

Yes, I didn't even keep my bitcoins on exchangers wallets before the fork, and I'm sure lots of people did the same. I better not take such risk, although I left a little bit on exchangers wallets, and they were safe; but that was Xapo wallet. Some exchangers did credit their users, while some of them didn't.

Not all forks give holders free credit.

I wonder how many cents they will cost then?

Unless the fork created a new blockchain that started from zero and that did not had the transactions history of bitcoin, then that would not be possible, a fork based on the bitcoin blockchain will need to give you free coins, I’m not an expert but I do not see a way around that.

I would actually agree with you for the average user, but it not worth the risk for many which is why we didnt put our coins on an exchange. I could have made 3x what I did on my coins, but I would have been increasing the risk exponentially if my account was accessed and drained.

I am happy that before August 1, I did not listen much to the overload of FUD online regarding what can happen in SegWit and the resulting fork or split of Bitcoin. There were so many hypes and fear-mongering which were baseless and if anyone will listen to them may just panic and withdraw all his Bitcoin into fiat money. 

I deposited my little Bitcoin in Bittrex because I read that they are supporting the split and I would be given my free BitcoinCash (BCH) immediately after the said date. Yes, they are reputable enough and after some days I was able to sell my share of BCH on the exchange. I am happy for that. And I love Bittrex...hope the US government will not touch them for anything.

People who always listen to lies and hypes will end up losing money here in cryptocurrency. I already learn my big lessons in the past and hopefully all of us should stop and just stick to the real news in case something of this magnitude can happen again in Bitcoin.

Logic, hodlers don't keep bitcoins in exchanges because they don't believe in short-term trading and their perception of bitcoin price is much broader than a few dollars high or low.

Future/Fair, it sounds like forking is an ever occurring event ;D It is free coins, have funds in exchanges, you dumped it quickly and made a few dollars. You are a hodler, no dumping, hodl the free coins. In the long term it might end up in profit or null/free, no loss, no impact on the bitcoins you are hodling.

Hard fork/coins in exchanges/no control over your funds/free coins = Fair

Hard fork/cold storage/control over your funds/HODL/dump/choice = Fair

It is choice, priority. If you think it is good to have your funds on a third party website during a fork to get free coins, then it is fair. If you think having control of your funds during a fork to have delayed access to free coins, it is fair.

The thing is that people are actually taking a huge risk if they decided to keep their bitcoin on an exchange, in case of a hard fork like this one. So many things can go wrong and in the end, the person storing the bitcoins might get nothing in return for taking the risk.

For instance, Xapo is deciding to credit their customers account but when they are going to do it is completely unclear.

An exchange could potentially do something similar, promising to have accounts credited by 2nd August for instance but not crediting until the 10th. Or, the orderbooks could be empty and you can't withdraw your token.

Plus, making profit isn't the point of forks anyways, or at least the main end-goal. And we can't control people from making useless altcoins because that's just impossible.

Only a very few exchanges (such as YoBit and Bittrex) allowed the users to trade in BCH immediately after the chain came up online. The other exchanges were late by a few days, and some of them are yet to credit the BCH or allow the trading in that currency.

The people that let themselves be influenced by all the FUD do not know any better, I’m of the opinion that we must inform ourselves throughly when it comes to our investments and that includes bitcoin as well, if people actually did that FUD will diminish since it would lose its effectiveness.

Im afraid it is easier to dump your bitcoins in exchanges than cold storage or private wallets if i understand your question correctly. Because it is much more riskier if you put your private keys on exchanges cause you might get influenced by selling it while private wallets are safe havens to keep your bitcoins and if you decide to cash out you can quickly get your money and convert it to fiat or use your bitcoins to buy some goods and services. Instead of exchanges that charge high fees in withdrawal and might steal your private keys with some fake transactions.

i don't think this "encouragement" was that big because as we have seen in the past days ever since the hard fork happened, the volume of dumps on exchanges from people who were holding their coins there has not been that big. and this shows not that many were actually keeping bitcoin on exchanges.

in fact as a trader you keep funds on exchanges but they are mostly in a trade like you having an altcoin and setting an open sell order and waiting for it to be filled.

Are you sure?

There is no warranty that they will receive any fork coin, neither when.And you can't never be 100% sure that a surprise fork will happen.

I too transferred my bitcoins from exchange to my electrum wallet so that it would remain secure.It really remained secure but i missed the chance of getting free BCC coins equivalent to BTC i had.Many sold out their BCC coins for some extra cash.So,next time,if such a hard fork happens,then i would keep my bitcoins in exchange much before to get some free coins.

True, coinbase at the beginning did not support the bitcoin cash fork at all and suggested to the traders in their platform to withdraw their coins if they wanted to receive bitcoin cash, now it seems they are going to give BCH to those that decided to not withdraw their coins but they are going to receive those coins until next year.