The Transaction Label Hard Fork is used to record incoming assets from hard forks in your integration. If you participated in a hard fork, you will receive new coins, which are either automatically recorded in Exchange or Wallet Integrations or have to be entered manually in Manual Integrations.
How do I create a Hard Fork inflow?
Important: If you have received a hard fork, the inflow should be adjusted in the integration in which the original asset was held at the time of the hard fork. If the original asset is missing at the time of the hard fork, this will be shown up as an issue in the calculation of the tax report.
- Open your Blockpit Account and click on the top menu item Add.
- Now select Add Transaction.
- Enter the Date and Time of the transaction.
In case of a manually created transaction directly in the WebApp, use your local time.
If the transaction is imported via CSV/Excel, use the standard exchange time UTC.
- Now select the Transaction Label Airdrop.
- Now enter the Integration, Asset and Amount. If you paid Fees, enter them with quantity and currency as well.
Tip: In the input fields for assets, you can enter the short name (BTC) or long name (Bitcoin) as a search term to narrow down the search of the displayed list. If your asset is not selectable, you can get more information here.
- Finally, click Create to complete the process and display the transaction in the Integration.
If a Hard Fork is created as a manual transaction in a Manual Integration, it will have a direct impact on the displayed asset balance of your integration.
If a Hard Fork is created as a manual transaction in an Exchange or Wallet Integration, it will not directly affect the automatically and independently imported asset balance of your integration, but it will affect the final balance of your tax report.
How are fees considered for Hard Forks?
Example: Hard Fork inflow of 1 BTC with 0.0001 BTC fee.
Fees are mostly considered on the withdrawal side, but can also occur on deposits.
Fees, if paid in the incoming asset, will be considered as follows:
If fees are paid in the incoming asset:
Case1: No additional fee on the deposit side.
Incoming Amount: Net transaction amount (amount excluding fees)
Fees Amount: Enter nothing or 0
Case2: Additional fee on the deposit side.
"If the fee is paid in the incoming currency, the input must be increased by the amount of the fee. The fee will be treated as a separate outflow."
Incoming Amount: Net transaction amount (amount excluding fees) + fee amount
Fee Amount: Enter fee amount as well
Different approach of exchanges to Hard Fork?
Basically, a hard fork is a split of an original blockchain (coin) into two independent blockchains (coins). The reason for this is usually an intended improvement of the original blockchain technology through upgrades in the form of a hard- or softfork (softforks do not result in additional coins).
Hard forks therefore always happen on the blockchain itself and not on the exchanges. However, exchanges must also react to hard forks and, depending on the result of the hard fork, usually implement this technically in different ways.
If two independent assets result permanently from one hard fork, it must be considered that most of the newly created hard fork assets are not necessarily directly supported by sufficient computing power (miners/nodes) and therefore do not have any relevance or significance (listing) on exchanges.
However, if both assets remain and are listed, this is implemented on exchanges in most cases in the following way:
Example of a hard fork of Bitcoin Cash (BCH) on Binance on 11/15/2018:
Redistribution of BCH on 11/16/2018 + Redistribution of BSV on 11/16/20218
Since the originating asset BCH was "not really" renamed or redenominated and continues to be supported, the redistribution of BCH results in a doubling of the original asset and also an additional inflow of BSV, as can be seen in the figure.
This doubling must excluded from the tax report by the user retroactively!