How to get coins from hard forks and protect bitcoin private key?

Bitcoin as a first cryptocurrency is often used as a basement for forks. That means the whole blockchain will be cloned at some time point and your accounts with balances will be cloned as well. You can get new coins for free or even get bitcoins using exchanges. Every fork is used by hackers & thieves to steal private keys. For example, one of the Bitcoin Gold online wallets, that was recommended by Bitcoin Gold official site, was used to steal coins for a sum of 3.2 million USD. There are few rules that will protect your private keys.

What is a hard fork?

A hard fork is a creation of a copy of the original blockchain with additional functions, fixes in the protocol. That may be a small change like a bigger block size etc. Or it may be a new feature like anonymous transactions.

There are a lot of hard forks already made based on bitcoin:

  • Bitcoin Cash (BCH) — forked on August 1, 2017;
  • Bitcoin Gold (BTG) — forked on October 24, 2017;
  • Bitcoin Diamond (BCD) — forked on November 24, 2017;
  • Bitcoin Private (BTCP) — forked on February 28, 2018.

How are forks used to steal private keys?

Usually, a lot of scam websites (online wallets) are created before each hard fork. All of them propose to get free coins by sending private key or recovery seed (phrase). Another option is a mobile or desktop wallet that may be used to transfer coins to cryptocurrency exchange. At some point, stolen private keys are used to transfer all coins to other address.

Here is an example of scam website that was used to steal $3 million in bitcoins. Users were promted to submit private keys and recovery seeds.

If you will wait few weeks or even months you may avoid such a sad situation. But any way you risk losing bitcoins and all other forked coins. Because stolen private key fits all your accounts if you haven't sent coins to other address after hard fork done.

How to protect bitcoin private key?

Before using a new wallet to access your forked coins you must transfer your bitcoins to a new address after hard fork is made. This new address will use a new private key that is not available at the forked blockchain. That means nobody can steal it because it doesn't exist in the new blockchain. Your old private key may be used to access forked coins. So you risk losing only forked coins in the worst case.

Wait for some time before use an official wallet. Let it be tested and proved to work correctly.

How to convert forked coins to original bitcoins?

Use coinmarketcap to find supported cryptocurrency exchange. Find positive feedback about the selected exchange to make sure it works fairly. Made an exchange and transfer bitcoins back to your address. Don't store coins at cryptocurrency exchanges if you are not a trader.

If hard fork wasn't popular it may not appear at cryptocurrency exchanges. You will need to wait until that will happen.

29 April 2018 14 July 2019 1582

More like this

Add First Comment. Start a Discussion