Way back in July of 2016, Ethereum underwent a hardfork that resulted in the Ethereum and Ethereum Classic networks. Leading up to the ETH/ETC fork, and for some time after, people debated the merits of each chain, and disagreed upon which one would accrue the most users and value. After the fork, some Ethereum miners mined ETH, and some mined ETC. Both networks exist today, and people hodl and trade their tokens; however Ethereum has a marketcap of $200B and does 1,300,000 transactions per day with many full blocks, whereas Ethereum Classic has 0.5% the marketcap and does about 2% as many transactions with many empty blocks.
Today, Ethereum is undergoing a series of forks in a transition from its mining-based proof-of-work (PoW) security model to the token-based proof-of-stake (PoS). As Ethereum miners stand to be made obsolete by the process, it might be assumed that one of these forks could be contentious, leading to two different networks, one based on PoW, and one based on PoS. This is unlikely to happen.
Since 2016, applications have been been built upon Ethereum at a frenetic pace, most of them financial in nature. Critically, to add utility to these decentralized financial apps, a number of stable coin tokens have been added to the Ethereum network. Most of these tokens are designed to equal 1 USD in value. Some (such as DAI) are not backed by USD currency, but have a mechanism to print or destroy tokens based upon its value relative to the USD. Other tokens are backed by USD directly, such as USDC (USD Coin, backed by the company Coinbase) and USDT (Tether, backed by company Tether).
Digression: USDT is likely only partiailly backed by USD reserves. It is known that USDT has not always been backed by USD 1:1, and many people assume this remains to be the case. That said, where it is traded, USDT can be exchanged for assets as if it were backed by USD 1:1.Currently the marketcaps of USDC and USDT on Ethereum are $9B and $39B, respectively.
In addition to stable coins, other tokens have been issued on Ethereum that are backed by off-network assets. WBTC is a token that is backed 1:1 by BTC (Bitcoin) reserves. RealToken Inc., issues tokens that are backed by US real estate. The Fundament Group has issued tokens backed by real estate property in Germany. Pax Gold issued a token backed by an ounce of allocated gold. There are many others.
It is difficult to estimate the value of tokenized off-network assets on the Ethereum Network, however, WBTC alone has a marketcap of $7.5B.
More recently, the pace at which NFTs (non-fungible tokens) have been issued and traded on the Ethereum blockchain has increased dramatically. NFTs enable marketplaces such as OpenSea to attribute ownership to unique off-network assets. It is difficult to estimate the total marketcap of Ethereum-based NFTs, but Beeple's Everydays: The First 5,000 Days just sold for $70M at auction. It's likely that the combined value of Ethereum-based NFTs is a few billion USD, and it is growing.
Based on these assets, we can put a floor for the marketcap of off-network backed Ethereum tokens at $60B, or 30% of the value of the marketcap of ETH. These assets are held by many thousands of individuals across the globe, are traded regularly, and in some cases, are used as collateral in financial dervatives.
The tokenization of off-network assets has great consequence for any fork of Ethereum. If the network forks, the custodians of these off-network assets must decide which tokens they will honor, and which ones they will not. To put it simply, given a fork that results in Ethereum-PoW and Ethereum-PoS, Coinbase will either allow USDC-PoW or USDC-PoS to be redeemed for the USD it holds. This decision will immediately decrease the value of the network with the USDC that Coinbase does not honor. It will also liqudate a great many financial positions on that network. Given that Coinbase is in the process to offer Ethereum staking as part of the transition to ETH2, it's likely that USDC on the PoS chain will be backed by USD.
Companies like Coinbase, Tether and OpenSea will choose the winner of the next Ethereum forks. The miners will not.
Great observation, but is “unforkable” too strong? Say next year there’s a schism and we end up with ETH-chocolate and ETH-vanilla. Coinbase could exchange USDC for both, with initial exchange rates such that 1 ETHc + 1 ETHv = previous value of 1 ETH. Maybe with a 50/50 initial ratio. If you love chocolate, you can sell vanilla and buy chocolate and end up close to where you started. Or just hold your chocolate and let other vanilla detractors bid the chocolate price back up.
So, I guess what this means is if you have ETH, and the game forks in the future, you're at an unfortunate likelihood of becoming, ahem...forked yourself just by the odds of which tine you ended up on. Is that right? In other words, any forking (sorry, having trouble with my fingers trying to autocorrect :) ) is just as likely to be in your favor as against it, you have no control over the forking, so basically as a wise consumer holding ETH you'd...just really super discourage anyone getting any crazy ideas like forking into their head ever again. Is that it? Is this how a conservative democracy starts?
Any blocks created before the fork are on both forks. Therefore, any coins minted before the fork are on both forks. If you had 1 ETH before ETC broke off, you ended up with 1 ETH and 1 ETC. Think of it like a stock split. If you had 1 share of AAPL and held it through four 2:1 stock splits, you now hold 8 shares of AAPL (2x4). The question is which fork gets used/valued the most. Most people who held ETH sold their ETC shortly after the fork. There's no reason they can't both be successful, it's just devoting the same amount of energy to both forks can roughly be presumed to produce half the results on each one.