A group of 18 bitcoin exchanges has prepared for a possible split in the bitcoin network. The group released a statement which noted they intend to support a hardfork for practical reasons, designating it as an “incompatible protocol implementation.” The statement also said the group is not passing judgment on a hardfork.
The 18 exchanges include Bitfinex, Bitso, Bitbank, Bitonic, Bitstamp, Bitsquare, Bittrex, Bitt, BTCC, Btcchina.com, Coincheck, Coinfloor, Kraken, QuadrigaCX, Ripio, ShapeShift, The Rock Trading Ltd. and 7Laif.
Miners have the right to direct their hashing power to an alternative and “incompatible protocol implementation,” the statement noted.
The group also believes that hardforks should occur through a consensus of miners that has not yet occurred.
The hardfork is a possible solution to the backlog that the bitcoin network has experienced.
It was reported in February that around 900,000 bitcoins, amounting to around a billion dollars at the time, were stuck, due to limited transaction capacity.
Much of the bitcoin community is turning to Bitcoin Unlimited (BU) as a solution to solve the backlog issues. BU is an attempt to upgrade Bitcoin Core into a client that processes bitcoin transactions into blocks with a potential maximum size greater than the Core’s hard-coded limit of one megabyte, according to Wikipedia. BU, however, is highly controversial.
Bitcoin could potentially face a hardfork, effectively splitting the currency into two.
BU reached around 40 percent support over a 24-hour period last week, its highest ever. Miners such as Antpool, bitcoin’s biggest mining pool, have switched to BU.
Exchanges are responsible for maintaining an orderly and coherent approach to a hardfork, the group noted. They cannot suspend operations before the winning party in the BU debate becomes evident. Exchanges require continuous operations.
The group noted that its action has been taken for practical and operational reasons rather than philosophical or judgment considerations.
A contentious fork event could be inevitable and could deliver an avenue for chain capacity, but the exchanges see an obligation to their customers to enable a consistent and clear plan to reduce confusion surrounding the event.
The group of 18 exchanges has designated the BU fork as BTU or XBU. The Bitcoin Core deployment will trade as BTC or XBT, with all exchanges processing withdrawals and deposits in BTC even if the BTU chain acquires greater hashing power.
Certain exchanges will list the BTU. All will attempt to enable access to customers’ BTU.
None of the exchanges can list BTU unless they are able to run both chains independently and without incident.
The exchanges will require BU or any consensus breaking deployment to contain robust two-way replay protection.
For BU not to take this course of action will undermine the exchanges’ ability to maintain BTU for customers and will delay or not permit listing BTU.
Should a hardfork transpire, the Bitcoin Core deployment will continue to list as BTC or XBT while the new fork will list as BTU or XBU. This will not be without adequate replay protection, however.
The exchanges welcome all assistance the developers can provide in minimizing the risk that is inherent at this pivotal moment in bitcoin’s history.
Also read: Bitcoin Core supporter threatens zero day exploit if Bitcoin Unlimited hardforks
BU recently suffered a blow after attackers unleashed a new bug that crashed the system. Support for BU dropped to 32.6 percent following the attack, according to Coin.Dance, a website which tracks industry data.
Information from the tracking site illustrated that following the attacks, the number of nodes hosting BU fell to 410 from 781. This was the lowest level it dropped to since October last year when it started to steadily increase. It has since crept back up to 690.
Prior to the attack, some Bitcoin Core supporters threatened to attack the currency if the economic majority decides to increase transaction capacity through a hardfork.
As blockchain’s transaction issues remain, a solution to fixing the congestion needs to be agreed on.
Featured image from Shutterstock.
Bitcoin Price Trend and Investment: Reward Justifies the Risk
The recent rise in Bitcoin price is being cheered upon by the seasoned cryptocurrency community. The price rally and all the excitement surrounding it has influenced many people to jump on the
Blockstack Unveils Decentralized Tokenized Blockchain Web Browser
As the list of dApps (decentralized applications) grows ever longer, a new class of platform has started to arise. Decentralized browsers have been hitting the market at a steady stream this year, off
Bitcoin Should Figure in Your Investment Porfolio, Says Asset Advisor
Boris Schlossberg of BK Asset Management has joined the cadre of investment advisors who see bitcoin as a way for investors to hedge their bets against market uncertainty. Schlossberg, according to CN
The Latest Bitcoin Price Surge May Not Have Much to Do with Trade Speculation
Bitcoin, the popular cryptocurrencyâs price has been on a constant upward trend until yesterday, creating new records every other day. The increasing price trend has reminded many of the Mt Gox
In Wake Of Global Cyberattacks, Calls For Bitlicensing Grow
Netanella Treistman of Israeli law firm Yigal Arnon & Co. examines the growing pressure on global governments to issue Bitcoin licenses to manage the cryptocurrency-related concerns. Earlier this
Bitcoin Reasserts Itself Taking Back Over 50% Crypto Market Share
After dropping to a low of 46 percent, Bitcoin dominance (Bitcoin’s market capitalization as a percentage of total cryptocurrency market capitalization) is back over 50 percent. In a bear market,
All Top 20 Altcoins Fall By At Least 30%, Ripple Down to $6.2 Billion
Bitcoin, which experienced a 20 percent price drop from $2,500 to $1,900, actually had a relatively decent day.
All top 20 alternative cryptocurrencies (altcoins) declined by at least 30 percent on
Ethereum Briefly Accounts For 50% of Bitcoin’s Market Cap After Strong Rally
After surpassing the market cap of Ripple and reclaiming its spot as the second largest cryptocurrency or cryptoasset, Ethereum’s market cap briefly accounted for 50 percent of bitcoin’s market cap.