When bitcoin splits, is that like a stock splitting?

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Gauss44
Posts: 88
Joined: Wed Apr 24, 2013 12:53 pm

When bitcoin splits, is that like a stock splitting?

Post by Gauss44 »

How so, and how not? What are the pros and cons of a bitcoin split?
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Pajamas
Posts: 6015
Joined: Sun Jun 03, 2012 6:32 pm

Re: When bitcoin splits, is that like a stock splitting?

Post by Pajamas »

No, it's more like a software fork and results in two or more different versions while a stock split is like exchanging a dollar for four quarters or vice versa.

https://en.wikipedia.org/wiki/Fork_(sof ... velopment)

https://en.wikipedia.org/wiki/Stock_split

https://www.bloomberg.com/news/articles ... ting-again
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telemark
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Joined: Sat Aug 11, 2012 6:35 am

Re: When bitcoin splits, is that like a stock splitting?

Post by telemark »

Similarities: there are now two things where there was only one before.
Differences: pretty much everything else.

A fork means that some group has decided that an existing cryptocurrency isn't working out the way they would like, so they have created a new one to address the perceived problems. Often there will be another group loudly insisting that these are not problems at all. The value of the new currency may be sort of loosely tied to the value of the old one, at least at first, and then they will probably diverge.
Billionaire
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Joined: Sat Jan 04, 2014 3:05 pm

Re: When bitcoin splits, is that like a stock splitting?

Post by Billionaire »

When will people start going to jail over this scam?
Chuck
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Joined: Thu May 21, 2009 12:19 pm

Re: When bitcoin splits, is that like a stock splitting?

Post by Chuck »

Pretend you were writing a document in a word processor, except you can only add to the document, you can't go back and edit anything. Halfway through, you make a copy and give it to a friend. (Your friend's document is the "fork.")

Now, you and your friend both continue writing in the document. Everything new that you each add is not present in the other person's copy. Everything that was there before the copy (or fork) is in both copies. To the extent that Bitcoin is like a big shared document that you can only add stuff to the end, it is just like making two copies from one.

If you held 1.21 BTC before the fork, you now hold 1.21 BTC and 1.21 BCC. Your bitcoin holding was "forked" into Bitcoin Cash (BCC). Starting from the fork, transactions in both currencies are completely separate and unrelated. Hope that makes sense???
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