Does your wallet offer replay protection for the Segwit2x hard fork? If you are not sure, read this explanation below.
As explained in our hard fork announcement earlier this week, BTC.com wallet users will be able to access, control and transact with coins on both networks. Our wallet also offers replay attack protection to all of our users.
Unfortunately, this is not true for all wallets. This article’s goals is to help wallet users understand how to mitigate the risk of losing bitcoin in transactions after the hard fork.
What will happen after the fork?
Imagine that it is after the Segwit2x hard fork. Let’s assume you are using a wallet that has no built-in replay protection. With all those pre-fork anxieties behind you, you are ready to put your bitcoin into action.
Remember, after the fork you will have the same amount of post-fork bitcoin as you had in pre-fork bitcoin. For this example, let’s give the names BT1 and BT2.
OK, let’s take a look at some of the options!
Selling bitcoin on an exchange
After the fork, you decide to liquidate some of your coins. Let’s say you decide to send 0.3 BT1 to an exchange of your choice.
People with malicious intentions may attempt to take advantage of unsuspecting users who use wallets without replay protection. These actors can take a group of (if not all) transactions and “replay” them on the other side of chain. In this case, this would mean that you would not only send the 0.3 BT1 to the exchange, but also an equivalent of 0.3 BT2. This is called a replay attack. If you are outraged, rightly so! You could have kept your 0.3 BT2 and use it.
Paying with bitcoin
Now let’s see what happens if you decide to spend some of your coins. Say Bob sells amazing bikes for 0.02 bitcoin. The bikes look great, and you are happy to send 0.02 BT2 to Bob so you can have one for yourself.
When you pay 0.02 BT2, a person with malicious intentions could attempt to take your BT2 transaction and replay it on the BT1 chain. In this case, you will not only send 0.02 BT2 to Bob, but also 0.02 BT1. This is a lot more money than what you agreed upon!
Why would anybody make such an attack? The motivation of the attacker is not necessarily to gain money, but to create chaos within the network. The idea is similar to hackers creating viruses for destruction.
What can you do?
Some people get lucky, and don’t lose bitcoin in the types of transactions we described above. Others may simply never notice the lost amounts. But do you really want to take that risk?
Because many wallets support transactions exclusively on one side of the chain, it’s important that those wallets’ users find an alternative solution that allows them to use their bitcoin on both chains. Many wallet providers have not implemented or clarified their position on replay protection. Users who are uncertain should make preparations to move their bitcoin to a provider with a clear, solid stance on replay protection.
The BTC.com wallet offers full protection against replay attacks, and enables you to view your balance and transact on both sides of the fork. As proven with August’s Bitcoin Cash hard fork, BTC.com is proactive in empowering its wallet users, and intent on enabling a safe and smooth bitcoin experience during times of change.