On approximately November 18, Bitcoin will split into two chains: Segwit1x and Segwit2x. Because these chains share the same proof-of-work function (PoW) and neither change the difficulty adjustment algorithm (DAA), it is unlikely that both will survive simultaneously.
A complicating factor is the existence of Bitcoin Cash, a fork of Bitcoin which shares the same PoW but has in addition an improved DAA that ensures it can adjust downward in difficulty rapidly as needed in the event of miner evacuation, keeping its block interval at approximately 10 minutes on average. Bitcoin Cash cannot die, but Segwit1x and Segwit2x can both die.
These are the possible scenarios that may unfold starting November 18:

Scenario 1: The Flippening

Bitcoin Cash becomes the dominant chain measured by total PoW, Segwit1x survives with an "emergency hard fork" to a new PoW function or DAA, and Segwit2x dies.
This scenario is widely ignored or ridiculed in the Bitcoin community which is why the current price of Bitcoin is more than ten times the price of Bitcoin Cash. However, this scenario is actually the most likely due to the spectacular gains to be made by miners, speculators and businesses who game this scenario. Anyone who is in a position to cause the flippening can increase their money 10-fold in a month, followed by far higher long-term gains due to the ability of Bitcoin Cash to scale to a global audience.
If this scenario plays out, it will probably happen as follows:
  • Whales will buy Bitcoin Cash cheap and sell Bitcoin at its all-time highs in preparation for the flippening. Then by leveraging huge amounts of capital, whales will push the price of Bitcoin Cash up and the price of Bitcoin down at approximately the same time as the split between Segwit1x and Segwit2x.
  • Miners will now be incentivized to switch from Segwit1x/Segwit2x to Bitcoin Cash due to improved profitability, while Segwit1x and Segwit2x both struggle on suddenly far lower mining power. Miners themselves may also be whales and will deliberately cause the incentives to shift for their own double gain.
  • Segwit2x dies to due no ability to change the PoW or DAA (since that's not a part of the New York Agreement (NYA)).
  • Segwit1x changes its PoW and survives as an altcoin branded as "Bitcoin". Many in the Segwit1x community are already comfortable with this possibility, and more certainly will be if all of their value is threatened with destruction otherwise.
  • Over some period of time, Bitcoin Cash achieves status as the longest chain as measured by total PoW and some exchanges and businesses now regard it as being "Bitcoin".

Scenario 2: Segwit2x wins

Segwit2x becomes the dominant chain measured by total PoW, Segwit1x changes its PoW, and Bitcoin Cash survives.
This is the second most likely scenario due to the fact that a vast majority of miners and a majority of businesses have committed to Segwit2x as part of the NYA. However, this scenario is strictly less likely than the above due to the lesser gains to be made. No one can multiply their value by 10-fold in a short period of time in this scenario. And the long-term future is likely to continue to have infighting, high fees, and loss of market share to altcoins - it's better for business if Bitcoin Cash wins.
Note that, even if Segwit1x has a higher price on exchanges at the time of the fork, that does not help Segwit1x much if miners stick to their agreement and continue to mine Segwit2x. See Vinny Lingham's theory about how the minority chain cannot have a higher value.
In this scenario, similar to the above, it is most likely Segwit1x will change its PoW and become an altcoin in order to ensure its chain survives.

Scenario 3: Segwit1x wins

Segwit1x becomes the dominant chain measured by total PoW, Segwit2x dies, and Bitcoin Cash survives.
If the movement from the Segwit1x community is successful, Segwit2x will be prevented from occurring due to the community uprising. This scenario is less likely than the above two scenarios due to the lack of commitment from miners to mine the Segwit1x chain. Segwit1x will probably not survive on ~10% of mining power due to excessively long block times for several months. Trolling on social media is not a substitute for mining power.
In this scenario, Segwit2x completely dies as no parties in the NYA agreed to change the PoW function or DAA in order to allow it to survive.
This scenario can be encouraged by whales. If whales specifically desire to make Segwit1x the dominant chain, they can buy Segwit1x. If they are able to sustain a high price of Segwit1x due to a flood of capital that lasts beyond any insecurity, the miners are incentivized to switch back over from Segwit2x. However, this requires vastly more capital than the scenario in which Bitcoin Cash wins because the market cap of Bitcoin is more than 10 times that of Bitcoin Cash. Rational whales who actually want Bitcoin to succeed would prefer the Bitcoin Cash scenario.

Other Near-Term Scenarios

There are other scenarios that are logically possible, such as the co-existence of Segwit1x and Segwit2x with no further hard forks, but they are unlikely. I believe one of the above three scenarios will almost certainly be the scenario that plays out in November.

Long-Term Scenarios

Note that if Bitcoin Cash does not achieve majority mining power and total accumulated PoW, the situation will continue to be unstable past the November 18 fork. Over the long-term, Bitcoin Cash can both achieve a larger user-base than Segwit1x/Segwit2x and, because it has a better DAA, it can't die, and will therefore continue to be a thorn in the side of Bitcoin until it ultimately acquires majority mining support and becomes labeled "Bitcoin".
However, things could easily change long-term to affect these probabilities. For instance, if Bitcoin changes its DAA to be similar to Bitcoin Cash, then Bitcoin Cash's advantage will go away and the mining dominance of Bitcoin will continue.
Behind the pay wall you will find information about how I am personally allocating my funds in this situation.
 

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Comments
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I don't think scenario one is the most likely. In that scenario something you missed is the chaos and massive fear that would crash usd prices of all forks. Probably the market "caretakers" will avoid that possibility. Anyhow I've exchanged 10% of my BTC for BCH and also sodl some more BTC for fiat.
Popcorn time!
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Ryan you are a true asset to this community!
Another high value post, as always.
P.S. Loving Yours
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Great analysis, Ryan. The logic makes sense.
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I'm really happy you wrote this. I was playing around with different scenarios in my head and wondered what the optimal strategy for a whale would be and came to the same conclusion as you. Scenario n.1 is much more likely than most people understand - it is significantly more on their money than 10x (just recently Bitcoin Cash was almost 20:1 vs Bitcoin, so you can make 10-20x on your Bitcoin, and 30-40x on your Dollars if market flips at peak price).
There is one more reason I give an edge to Bitcoin Cash in the long term, it has Yours.org and Ryan X. Charles who seems to be the only tech guy in Bitcoin who actually understands markets.
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Great analysis. What happens if Bitcoin changes DAA to be similar to Bitcoin Cash? Do chains stabilize or does it become a DAA-race-to-the-bottom?
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Great analysis Ryan!
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@brew77: If Bitcoin changed it's DAA then the situation would end up being analogous to Ethereum vs. Ethereum Classic: Bitcoin and Bitcoin Cash could co-exist peacefully.
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I'm worried about the newbies to Bitcoin! They are betting a lot more money than we were several years ago and have potentially a lot more money to lose in this fork. I'm excited to see the results though! This is a historic time for Bitcoin in general, and for a while I thought no further "crazy" market fluctuations would happen!
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Great post! Do you have any recommendations for where to purchase BCC? I have used ViaBTC for a while to mine for BCC, but haven't actually purchased any. I'd love to know if you have some recommendations.
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@Erick: Kraken and Shapeshift support Bitcoin Cash.
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thanks, bitcoin cash is the real bitcoin, segwit coin is not.
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The fund allocation text beyond the paywall is mostly a disclaimer and risks warning. very little content. I personally split (70% BCH) vs (30% B2X + 0% B1X)
III

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big part of the current high price of BTC is because it has so many supporters and been around for so long. if BTC1 gets forked to death people would lose trust in crypto in general.. "the flippening" assumes that the winning bitcoin HAS to be worth > 5000$.. well its not, it took btc1 8 years to get there. so if btc1 fails, it wouldnt change the fact that bitcoin cash is still a piece of shit.. it may increase in price, but most certainly not 10-20x
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If Core doesn't make a 2MB hard fork, then BCH gets to about 50% BTC price or above for a while, after that who knows.
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the user 'Dude' is the first troll i've seen on yours.
Quite the milestone.

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Excellent post, Ryan. I agree that bitcoin cash is the future, but am concerned with 1 major issue. If BTC and B2X were to die, wouldn't the chaos cause a huge price drop in all cryptos?
It’s not that I don't think things will eventually recover..and I do believe Bitcoin Cash wins out in the end. I do wonder, however, if scenario # 1 were to play out, might it be possible to buy bitcoin cash (and every other crypto) much, much cheaper after the chaos dies down?
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@Jonathan Silverblood: I have added some information about my allocation.
@gberlant: There would be some chaos, however it doesn't change the fact that crypto is the future and there are spectacular gains to be made if you play your cards correctly. The chaos wouldn't last.
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Love your analysis, Ryan. While I still see scenario 2 more likely I am glad to hear your logic. However, after reading this I am going to start buying BCH on a regular basis.
Thanks for putting in the time to write this out. Love your youtube updates as well. For those that have not viewed it, here is the link: https://www.youtube.com/user/ryanxcharles/videos
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Thanks. I'm new and so ignorant of crypto in general, this has been a serious help. I still don't get it so a decent overview is a gift - like the literature review part of an article on a topic you know little about.
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Thanks for sharing knowledge. I'm a Old Newbie trying to don't regress to the dinosaur age. Finding you is part of my attempt to research as much as possible prior to full investment. I appreciate your candor and realize it is a single data point. So thank you!
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I am wondering how much of these main (Antpool, BTC.top, ViaBTC, BTC.com) mining pools are fractionalized inside? I mean is in example – Antpool - one or two people making decision or a few hundred separate people with probably separate views, incentives etc.? (I am not I a miner)If each of these giant mining pools represent hundreds of individuals, then I think 3ed Scenario -Segwit1x wins – has over 50% plus probability, because these 85/15 of flagged mining hashing power could steadily begun to move towards 70/30 and then 60/40 and then 50/50 percentile and at this point Segwit1x has the momentum ant the upper hand. And the fact that Bitcoin Cash is more profitable to mine could not help necessarily as much as you expect. Why? Because substantial part of theses small miners simple hate Bitcoin Cash and the idea that Bitcoin Cash could over take Bitcoin core terrifies them to the depths of their hearts. Do not underestimate the importance of these hours as it is of existential importance of BOOTH - Bitcoin Cash AND Bitcoin Core enthusiasts.
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I can't get enough of these healthy discussions. I am biased toward bitcoin cash for good reason, as I always do my own research and come to my own conclusions. Luckily for me I'm not emotionally attached really to any outcome. Everyone hopefully is financially prepared for what happens.
Popcorn will definitely be needed for this though.. Interesting times ahead for sure.
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I am not a newbie in crypto but this time I was somewhat confused with the plenty of scenarios I have already read about this fork situation. Then I stumbled on your post and when I read it that was the moment when the light turned up in my head. The logic was so crystal clear and brilliant that I immediately knew what should I do.
It is not my habit at all, but this time I had to say all in on the first scenario because I found the possibility very high and the risk-reward situation exceptionally good. I took the risk and it worked. Even without the fork I (and my friends) made a lot and I mean a LOT of money in a few days.
I am in the stock market for more than 20 years and in the crypto market for years but I can say for sure, this was one of the most brilliant analysis I have ever read.
I can't say how grateful I am for your post. THANK YOU.
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