[ricg]

Ok, stupid question: in real dollars, if I sell my ONE coin just before a fork or my then TWO coins right after the fork, will I end up with the same dollar amount?

For that to happen the old coin type would have to lose in price at which the fork starts. How is the price for a coin of a fork determined?

[lloeki]

For all intents and purposes, from the point of view of each chain, the other does not exists but it merely turns out their past are the same. IOW BTC is B2X (the money, not the unit) before the fork, and each one considers that its own blockchain is the Truth†. So:

    - from the BTC point of view, there is 1 BTC both before and after the fork
    - from the B2X point of view, there is 1 B2X both before and after the fork
    - at any one time the value of 1 BTC is whatever people want to exchange it for
    - at any one time the value of 1 B2X is whatever people want to exchange it for
    - it just turns out that BTC == B2X before the fork

Therefore the value of each one merely depends on how much people care to trade them for, and the fork may affect this value, both before and after. Both may crash, both may shoot through the roof, or anything in between independently. But yes indeed since they come from the same past, if T is the last common transaction on the blockchain, then in between T and T+1 your 1(BTC+B2X) == X$ just became 1BTC + 1B2X == Y$ + Z$ (which at that precise, immaterial, instant == X$ + X$) by virtue of the fact that they disagree about the validity of any transaction you may make on each chain, including ones that get $$ out of the system. Hence you can "double spend" the coin. But speculation may shortly thereafter make Y and Z stay == X$ + X$, or become X$ + 0$, or X/2$ + X/2$).

† Without replay protection, transactions may or may not be replayed, but the blockchains do differ.

[ricg]

So if the exchange price for BTC does not drop by the same amount of the exchange price for B2X, a fork essentially means money (dollars) is generated out of nothing and given to me as the owner of now 2 coins (one of each type)?

Or in the opposite case, a fork could mean I lose money, just because somebody else decided to create fork?

[corobo]

In fairness you could also lose money because it's Bitcoin and its value is all over the place, fork or no fork

[Slartie]

Theoretically, this is true. The value, and hence the price, is splitted. But markets are not perfectly efficient, and Bitcoin markets in particular are very inefficient and totally driven by psychology, particularly speculation and greed.

This can make you end up with either a larger sum if you buy exactly before and sell shortly after the fork, or a smaller sum. Why should the sum be larger? Because there's people on both sides of the fence (the original coin and the forked coin) which think that their coin will "win the race", thus they include a certain additional, speculative value deducted from assumed future price increases into their estimates of the current value of their preferred coin. This drives up the speculative value of both coins simultaneously, and since either side focuses mostly on its preferred coin, driving up the perceived value of it, and neglects "driving down" the perceived value of the other sides' coin (because of disinterest or simply because driving down perceived value is much harder than driving it up, as humans are usually focused on positive things), this can result in a situation in which the mathematical sum of the speculative value added to both post-fork coins is quite a bit larger than the "combined" speculative value that was previously included in the original coin.

This is, in my opinion, exactly what happened with the Bitcoin Cash fork earlier this year. For this Segwit fork, people saw that the earlier fork "created value out of thin air" and thus began to incorporate some of this assumed future value into their value proposition of the coin pre-fork. This drove the price increase right before the fork (well, partly - there was also the CME news, which was a big driver, too). Funny enough, this time it probably won't work out as it did last time - the fork was "called off", and even if it would happen, it most likely will not result in a similar situation due to a) the "free money" having already been priced in during the time before the fork and b) the fork being a "colliding fork" this time, with both coins wanting to be "the real Bitcoin", having no replay protection or real separation of both networks. They wouldn't have coexisted for long - one of them would have "won" and captured the vast majority of value, while the other one would have diminished to the low 3-digit or even 2-digit price realm (effectively equaling a worthless coin, as in crypto, there is NEVER a really worthless coin in terms of having a price of zero - there is always someone wanting to pay some price, albeit very low, for anything that has "crypto" attached to it ;-) ).

[celticninja]

You are attaching way too much logic to working out the bitcoin price.

[Sholmesy]

That's a hard question, based around the market sentiment of the new coin.

In theory, yes, the value is split. The value is only derived from speculation, and the speculative value of the coin 1ms pre-fork must be the same as the value of the two coins 1ms post-fork, since otherwise people would simply buy immediately before the fork, and then sell immediately after, driving the prices to an equilibrium.

In reality, this is what has happened with this fork hype, people were buying w/ the idea of getting a 'free' coin, like how last time the value of Bitcoin + Bitcoin Cash was far higher than the original pre-fork value of Bitcoin. However, this has driven the price up, causing there to be even MORE hype, which will likely see the price of Bitcoin stay high, since it is now "trending up".

[tmlee]

That applies to stock split; before the bitcoin cash split, everyone was expecting that should be the case.

However in this market; market is irrational and it all depends on how the market is willing to price it pre/post fork. No, you won't wind up with the same dollar amount.

[zodiac]

> How is the price for a coin of a fork determined?

The same way the price of any coin is determined, the market-clearing price on exchanges.

[redka]

No you wouldn't. The price is determined by the orders that people place on the exchange and those can be anything