In a blog post on July 13, GDAX announced it will temporarily suspend Bitcoin transactions…
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In a blog post on July 13, GDAX announced it will temporarily suspend Bitcoin transactions if a soft fork is activated on August 1.
Tension is ratcheting up as the August 1 deadline for the BIP148 User Activated Soft Fork (UASF) approaches. Prices have already slumped in anticipation of a major market disruption, and most blogs have urged users to start protecting their Bitcoins in private wallets.
The soft fork on August 1 may result in the creation of two blockchains, with one that supports BIP148 and another that doesn’t. This begs the question: What will major crypto exchanges do in the case of a soft fork?
GDAX Prepares for a Chain Split
In a blog post on July 13, GDAX announced that will be temporarily suspending Bitcoin transactions in order to protect customer funds should a soft fork occur. GDAX is the crypto trading platform owned by Coinbase, which is currently the world’s largest Bitcoin exchange.
According to GDAX General Manager Adam White:
We will implement safeguards to ensure the safety of our customers’ funds. For example, we will temporarily suspend the deposit and withdrawal of bitcoin on GDAX and may pause the trading of bitcoin as well. This decision will be based on our assessment of the technical risks posed by the fork, such as replay attacks and other factors that could create network instability.
Two Minutes to Midnight
The UASF is designed to force activation of Segregated Witness (SegWit), which would increase the block size limit on the blockchain by removing signature data from Bitcoin transactions. BIP148 has been met with a great deal of controversy, with many nodes signaling support for an alternative scaling solution known as SegWit2x.
SegWit2x is a scaling solution which combines the activation of Segregated Witness with a 2mb blocksize increase. Segwit2x requires 80% of network hash power to signal support for it. It achieved that support at the beginning of the month when signaling for SegWit2x skyrocketed to around 88%.
Know Your Bitcoin Hard Forks! Diagram of upcoming potential hard forks. #UASF #SegWit #Segwit2x #bip91 pic.twitter.com/nuNL00KXEK
— Ades (@ades) July 15, 2017
However, current signaling for SegWit2x only indicates the intention to support it. Actual signaling for SegWit2x will begin on July 21, a little over a week before the August 1 deadline.
Because miners who promised to activate SegWit2x may fail to do so on July 21, many others are still signaling support of BIP148. Should miners fail to follow-through, a chain split on August 1 remains likely.
Are you anticipating a chain split come August 1? Do you think that SegWit2x will find the support it needs on Jul 21? Tell us your concerns in the comments below.
Images courtesy of Wikimedia Commons, AdobeStock