The Bitcoin Private hard fork, ZClassic and the so-called spork

The Bitcoin Private hard fork is scheduled for February 28th, 2018. What is it? How do you get it? What will it be worth? And what does it have to do with ZCash.

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What the fork are you talking about?

There is a hard forking coming for BTC soon. The new branch of the chain will be privacy focused — boasting similar tech the popular ZCash coin.

If you own BTC at time of the fork, your private keys entitle you to BTCP for the same amount. Same like the other forks. But this time, if you own ZClassic (ZCL) at time of fork then you also get BTCP. So, for example if you had one of each, the formula would be:

1 BTC + 1 ZCL = 2BTCP

I can understand the BTC owners getting it, since all the UTXOs in the Bitcoin ledger would naturally be spendable on the new chain. Tossing in the ZClassic makes some sense because of the similar goals of the project. The problem here for me is how the devs are piggy backing off the hype and brand of Bitcoin.

Heres an announcement video explaining the reasoning:

The ZClassic hard fork announcement

Ahh, so the reason for this is to achieve a non-contentious hard fork from ZClassic. What Rhett smugly referred to as a spork. In other words, the miners do not have to agree to change the protocol. They go on verifying ZClassic transactions as usual and a new set of miners can start working on Bitcoin Private. Similar tech, different set of miners, different name.

What’s ZClassic?

This is a coin that’s recently been dragged from the depths of the crypto charts. It currently slugs around position 100 with a market cap of 200 million dollars (at time of writing — Jan 4th).

Here’s what their website says:

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If financial freedom is a rollercoaster ride of emotion where your assets can drop to near zero value at any time — then yes I agree.

ZClassic is simply a fork of the privacy coin ZCash, with no “founders tax”. The founder tax was basically something in place to make the ZCash creators money from ZCash transaction fees — not cool.

So yeah I like ZClassic more than ZCash, but from the sounds of it the project is being abandoned in favour of Bitcoin Private (BTCP). So who knows what might happen to ZCL going forward.

Here’s the main dude responsible for this stuff 👏

He appears to have some chops in the crypto space as a developer, and want’s to use his nerd powers to get rich. Cool. For example, check out what happened to the ZClassic price after he posted these tweets in December

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ZCL price following Rhett’s twitter post

Haha now that’s what I call influence.

It’s worth showing the whole price history of ZCL, to give some context as to it’s current rate, which is near previous BTC support levels.

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Let’s talk $$. What will BTCP be worth?

Remember that formula above? It went like 1 BTC + 1 ZCL = 2 BTCP.

So for total coin circulation I expect roughly:

16,780,000 BTC + 1,900,000 ZCL = ~18.7 million BTCP

So if this turns out to be worth the same as previous hard fork Bitcoin Gold (BTG) [currently ranking 16th] then we would expect each BTCP coin to trade at about $250, which happens to be the ZCL price at time of writing.

If you are even more optimistic and think this could trade at Bitcoin Cash (BCH) levels [currently ranking 4th] then factor in a 10x boost to $2200 per BTCP coin.

My 2¢

I’m not crazy bullish on ZClassic right now after the move to $100, but my back-of-the-napkin analysis above has convinced me that it’s a decent valuation. Sooo… heres a plan that gets my dubious seal of approval:

  • Buy ZClassic — some amount that you are willing to lose. Like buying an expensive comic book or piece of art.
  • Send it to a wallet on your computer so you are in control of your private keys. You could use Electrum, Eleos or other ZClassic wallets.
  • Retrieve your BTCP once available.

Things that can go wrong

  • The hard fork fails. Too many bugs and devs just give up [very unlikely].
  • You can lose the ZCL in transferring it around and extracting BTCP [just be careful and you should be OK].
  • The fork is delayed significantly and ZCL loses value.

Update — 2018–02–21

  • Coinomi digital wallet for Android has added support for ZCL and will support the fork
  • Since writing, the price has gone as high as $230 and is currently $160
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Update — 2018–03–04

  • As expected, the price of ZCL dropped dramatically after the fork. It’s currently trading around 10 bucks a coin, and I see no reason for it to stop bleeding out for months or even years. Maybe forever.
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  • Perhaps what’s less surprising is the sell off leading up to the fork. This happened for two reasons:
  1. The exchange which accounted for nearly all ZCL volume, Bittrex, did not indicate they would support the fork. Users who did not send ZCL off the exchange would therefore have no guarantee of receiving BTCP. It would be out of character for Bittrex to give users what they deserve and almost unthinkable for them to announce support for the fork.
  2. People knew the price would plummet after the fork, and were not willing to speculate on BTCP. For many this was the plan all along: ride the BTCP hype and sell right before the fork.

Update — 2018–04–01

Bitcoin Private failed to get listed on major exchanges. Even some exchanges that traded ZClassic and supported the fork did not list it.

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The price behaved accordingly:

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Don’t forget that Alt market has been dying over that timeframe overall. But considering how high ZCL was trading at prior to the fork, this was quite unexpected for many speculators.

For those who had a bad forking experience (pun intended), you can consider doubling your position now for huge discount on your initial expectations. For example, if you had bought 1 ZCL at $150, you could now double your BTCP position with just like $30. This is me speaking purely from a technical analysis perspective. You would be gambling that BTCP gets listed on major exchanges like Binance.

On the other hand, if things don’t work out then Reht and the boys could just as easily do it all over again with the next shit coin they spot. Think about that…

Update — 2018–04–30

Well BTCP pretty much failed. There’s still hope if good developers offer their support, but it’s safe to say that investors are not too happy at this point.

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Rhett sure doesn’t care. He’s ALREDY moving on to something he’s calling Bitcoin Prime. Nice move bud.

Here’s my reply (which promptly got me blocked from his twitter)

I’d like to hear what you think, drop a comment below to chat or point out any errors you noticed in the article.

Also, you can get in touch with me here on twitter.

Written by

Python Data Engineer, MSc. Physics

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