Over the past few weeks, bitcoin proponents have been quarreling online about the lack of replay attack protection for the pending Segwit2x fork scheduled for this November. As time draws closer, a lot of bitcoiners are planning on sitting tight to ride out the storm. However, there are also individuals searching for replay-protected exchanges, wallet providers, and alternative techniques to protect themselves.The decentralized cryptocurrency bitcoin and many other altcoins utilize a data storage concept called Unspent Transaction Outputs (UTXO). Someone who owns bitcoin in a non-custodial wallet has a list of “unspent” satoshis which primarily contains the user’s balance data. The sum of the bitcoin owner’s UTXOs is the individuals or organizations entire balance.
When a fork takes place on the network, there can be network confusion or replays when people are sending bitcoin transactions which could lead to financial losses. Because the split happens on the same chain, all transactions, addresses, and balances will be a direct reflection of the chain before the fork. This means UTXOs can be confirmed by miners on both chains and can theoretically be manipulated by malicious actors, or other types of transaction mistakes can happen. For example, if bitcoin is sent to an address on the Segwit2x chain it’s possible the UTXO can be replayed on both.
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