Over the past few days, the Bitcoin network scaling debate has been a viral topic as the community has begun deliberating the viability of a hard fork and a possible blockchain split.
A Large Group of Bitcoin Exchanges Reveal Hard Fork Contingency Framework
On March 17 roughly twenty well-known exchanges released a statement concerning the possibility of a hard fork and a network split. The statement noted that the exchanges believe a hard fork is imminent and how their business plan looks in that situation. The exchanges that signed the letter of intent statement detailed their plans of listing both token assets if a blockchain split takes place. This would include asset listings for Bitcoin Core and Bitcoin Unlimited (BU) protocols. Exchanges who signed the letter include Bitstamp, BTCC, Bitsquare, Shapeshift, Kraken, and more.
“We have decided to designate the Bitcoin Unlimited fork as BTU (or XBU),” explains the participating exchanges. “The Bitcoin Core implementation will continue to trade as BTC (or XBT), and all exchanges will process deposits and withdrawals in BTC even if the BTU chain has more hashing power.”
However, the statement of how exchanges would designate the names of the tokens listed has become a contentious issue for those supporting BU. Furthermore, the community and two signatory exchanges had noticed that the letter of intent was altered after it was published. Both Shapeshift and Kraken who signed the letter stated there were changes made to the original document they had signed. The issue at hand was calling the Core protocol BTC, even if that client was not the longest chain with the most proof-of-work running. Kraken explained they did not want to be in a position to decide which chain gets to keep the BTC moniker. Shapeshift founder Erik Voorhees explained his opinion of the name issue on Twitter stating:
“For the record, myself (personally) and Shapeshift would use the BTC/Bitcoin name for whichever chain unambiguously “won,” over time,” Voorhees detailed.
Exchanges profit on volatility and wealth moveing across chains they support.
Miners profit from increasing value of coins they mine.
— Gavin Andresen (@gavinandresen) March 18, 2017
Coinbase Releases a Statement
On March 18 Coinbase founder Brian Armstrong revealed his opinion of the recent contingency plan letter and explained why his company did not participate.
“Coinbase didn’t sign this letter because I think the intention behind it is wrong,” Armstrong states. “On the surface, it is a communication about how exchanges would handle the hard fork, and a request to BU for replay attack protection. But my concern was that it was actually a thinly veiled attempt to keep the BTC moniker pegged to Core software. I think a number of people who put their name on it didn’t realize this.”
Armstrong agrees that listing forked assets makes sense, but he doesn’t believe the BTC name should automatically go to one development team. “If there is overwhelming support from miners and users around any new version of the software (regardless of who wrote it), then I think that will be called Bitcoin (or BTC),” says Armstrong. The Coinbase founder says the company wishes to remain neutral in the debate.
Bitfinex Introduces Listing Pairs
Additionally, one of the exchanges who participated in the letter, Bitfinex released its own listing plan called Chain Split Tokens (CST). Bitfinex customers will be allowed to speculate on the future events of a fork using the CST tokens which include BCC (Bitcoin Core) and BCU (Bitcoin Unlimited).
“Users will be able to create CSTs by “splitting” a bitcoin through the Token Manager (located in the order type drop-down menu of the sidebar order ticket),” Bitfinex explains on their website. “Once split, the BTC will be removed from your account for each BCC, and BCU added. Through the same Token Manager, you will be able to reverse this process at any time, trading in equal numbers of BCC and BCU to extract BTC.”
The discussion doesn’t seem to be over as far as the bitcoin name and branding is concerned. After the contingency letter, bitcoin proponent Olivier Janssens started a petition to get exchanges to remain neutral and not choose sides. “Designating Bitcoin Core as the default Bitcoin BTC/XBT is premature at best and at this point a highly political decision,” Janssens petition explains. There are quite a few bitcoin supporters who agree with Voorhees, Janssens, and Armstrong’s opinions concerning the longest chain getting the right to the BTC name, as many of them have referred to this quote offered by Satoshi in the bitcoin white paper;
It is strictly necessary that the longest chain is always considered the valid one.
Community Discussions Continue
At press time Bitcoin Unlimited has roughly 35 percent of mining support so it still may be a while before any speculated split event takes place. It’s safe to say as of right now no one can predict who will rightfully claim the BTC name and branding, especially with a letter of intent that is disputed by other well-known exchanges.
I love how industry-signed letters are becoming our new favorite consensus algorithm.
— Vitalik Buterin (@VitalikButerin) March 19, 2017
The discussion will likely continue, and Bitcoin.com will be following these events closely to keep our readers informed every step of the way.
What do you think about the contingency plan drafted by some of the exchanges? Do you think that the BTC name should just be designated with Core or do you think the name belongs to the longest running chain? Let us know what you think in the comments below.
Images courtesy of Shutterstock, Pixabay, and Twitter.
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