You might have heard about an upcoming Bitcoin Cash (BCH) hard fork scheduled for November 15th, so we wanted to let you know what it means, and how it will affect you.
TL;DR: Your BCH holdings will be safe. You’ll be able to continue to trade through the event as normal. For a more detailed explanation, see below.
We do have an FAQ about hard forks here, but as a reminder:
What are forks?
A fork is a change in the underlying protocol a cryptocurrency is running on. Essentially, it’s a change to the set of rules all participants agree on when validating and verifying transactions on the network.
What are soft forks?
Soft forks are changes that are backwards compatible with older versions of the software participants use to validate and verify the crypto network meaning that participants don’t need to upgrade to new software to be able to keep participating. Whether they update or not, they’ll still be able to recognise new blocks on the blockchain. Soft forks happen fairly often and don’t generally affect users.
What are hard forks?
Hard forks are changes that aren’t backwards compatible. So all miners (nodes in the network that collect transactions and organise them into blocks) need to upgrade to be able to participate in creating and validating new blocks. In an uncontested hard fork, all miners agree to upgrade and everything continues to run smoothly.
Where members of the community disagree with the changes, the fork is contested, so some will choose to accept the new protocol rules and others will continue to use the old protocol rules. This results in a split in the blockchain as one set of miners mine new blocks with the old rules, and another set of miners mine new blocks with the new rules.
One chain will essentially have more economic activity, hash power (the speed at which the mining devices operate) and support from the community and this will continue to be considered the main chain and ‘original’ coin after the fork happens.
Two things can happen to the other chain:
- It will die out as miners and validators see the other chain has ‘won’ and abandon it
- Miners and validators will continue to mine the other chain and two viable chains continue moving forward
In scenario 2, essentially another coin is created. This is how Bitcoin Cash was created (during a contentious hard fork with Bitcoin). The chain with more economic activity, hash power, and support from the community is considered the original coin and will continue to trade as such on the exchanges while the other chain is regarded as the new coin.
When a hard fork results in the creation of a new coin (in addition to the original coin), this essentially means that all balances on the blockchain at the point of the split are valid for the new coin as well as the original coin. If you were holding your original coins in a non-custodial wallet (where you’re looking after your private keys), you could use your private keys to also ‘spend’ and ‘send’ these new coins. But there’s no guarantee they’ll be ever added to exchanges as an official coin to be traded or that they’ll ever have value. Remember that Revolut is a custodial solution, so you won’t automatically get the ability to access or spend any new coins created by a fork.
Revolut’s approach to hard forks
As we said, your existing balance will be unaffected and safe with us - you don’t have to worry. You can continue to trade it as normal before, during, and after the fork. If the fork results in another coin being created in addition to BCH, we do cover this in our Terms & Conditions but as a reminder:
There’s always extreme uncertainty around such events, and therefore there are no guarantees that we will or will not support the introduction of new cryptocurrencies as a result of hard forks. But rest assured - we’ll always let you know in advance if we plan to make any additions to the cryptocurrencies we support.
If you believe that as the result of a hard fork there will be two viable currencies moving forward, and you want to have the chance of getting access to the new coins, your best option would be to acquire BCH from another source and then hold your BCH balance on a hardware wallet such as Trezor or Ledger during the fork. If you decide to do this, please be really careful and do appropriate due diligence as, during these kinds of contested forks, phishing and scam attempts tend to be more common. If you do go for this option, remain vigilant!
If I leave my funds on Revolut during the fork, will they be safe?
Yes, your BCH will remain perfectly safe at Revolut throughout the fork. Although, it may experience price volatility. Our primary goal during this fork is to protect customer funds.
We’re working on some nice additions to our cryptocurrency product as we speak so keep an eye on our updates in the run-up to Christmas.
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