Bitcoin Fork Risk: Selling New Coins May Drain Your Real BTC

A potential Bitcoin fork tied to BIP-110 is raising concerns about duplicate balances and replay attacks. If the fork occurs, holders will have the same balance on both chains, with the second copy potentially being worth little or nothing.

Sellers may be tempted to sell their new coins at what seems like a good price, but this could trigger a replay attack that also spends the seller's real Bitcoin on the main chain. Without built-in replay protection until at least early September, developers warn non-experts to avoid moving coins during the potential split.

The BIP-110 proposal aims to keep pictures, text, and other non-payment data out of Bitcoin transactions for a year. However, its implementation could lead to a minority branch being created, resulting in two competing versions of the transaction history. If this happens, every Bitcoin holder will initially have the same balance on both chains.

Bitcoin developer Kevin Loaec has flagged the risk, stating that large holders may be targeted first and that doing nothing is a safer option, as coins that never move cannot be replayed because there is no signed transaction to copy.