Chinese BTC investor has sued OKCoin for claiming his Bitcoin Cash.
On July 31, a Chinese Bitcoin investor sued local crypto exchange OKCoin for allegedly blocking him from getting his Bitcoin Cash (BCH) after the Bitcoin fork.
While the case is new for China, compilations regarding hard forks and exchanges have been amassing since perhaps as early as the DAO incident in 2016. So what happens when you have a coin that is about to be split into two, but you’re holding it on an exchange’s hot wallet?
What’s a hard fork?
Essentially, a hard fork is a change to the cryptocurrency’s protocol that makes previously invalid blocks/transactions valid — and vice versa — and therefore requires all users to upgrade to the latest version. In other words, a hard fork splits the path of the asset’s underlying blockchain, wherein the upgraded, separated blocks start following new sets of rules. Simply put, it’s the equivalent of a ‘reset’ button. There’s also a soft fork, which entails a change of protocol as well, although such forks can still work with older versions.
Why launch a hard fork at all? Basically, it can be initiated to correct security risks found in older versions of the software, to add new functionality or to reverse transactions. The latter, for instance, was the reason for the infamous DAO hard fork, which will be described in greater detail in the next section.
According to data obtained from Forkdrop.io, there are currently 116 forks, 74 of which are affiliated with Bitcoin. There are major ones, like Bitcoin Cash (BCH), Ethereum Classic (ETC) or Bitcoin Gold (BGD), that compete with the top coins and are commonly listed on the largest exchanges — they rank 4th, 12th and 24th respectively, as per Coinmarketcap. There are also smaller ones that are worth just a few cents, and are hence less likely to be featured on large platforms. Charlie Lee, the creator of Litecoin who previously worked at Coinbase, described how the