Xapo Announces Position on Segwit2x Hard Fork

Xapo Announces Position on Segwit2x Hard Fork

Today, Xapo made an announcement to inform their customers, stating that Xapo customers won’t have to do anything in order to get the new forked coins in their wallets. The statement reads:

“Just like we did with the Bitcoin Cash fork, if you are a Xapo customer you don’t need to do anything, we will take care of the security of your bitcoins and we will make the new coin available for you to easily sell or withdraw. Xapo’s policy in regards to forks is that, when there is a fork, we always follow the chain with the most accumulated difficulty and we make the minority chain available to our customers for them to sell or withdraw from Xapo.”

At the time, miners are very close to the block number 490,000 on the Bitcoin blockchain. When the block number 494,784 is mined, which is estimated to happen on November 18th, 2017, a block between 1MB and 2MB in size will be generated by the miners to expand the network capacity, giving way to second stage in the SegWit2x agreement.

At that point, some miners may decide to neglect that block and continue mining on a 1MB block max-sized chain. If so, the 2x hard fork could generate a second chain split of the Bitcoin network in 2017, one that could also result in the conception of yet another version of the Bitcoin blockchain with its own individual cryptocurrency, much like Bitcoin Cash.

Coinbase Will Allow Users to Access Both Bitcoins

Loading cryptocurrency exchange, Coinbase has also shared its stance on the subject, announcing that it will allow users to access both competing blockchains following the SegWit2x hard fork which is scheduled for November. Coinbase made the announcement in a blog post written by Dan Romero, the company’s vice president of operations. The announcement reads:

“We operate by the principle that our customers should benefit to the greatest extent possible from hard forks or other unexpected events. (…) This is essential in our mission to make Coinbase the most trusted, safe, and easy-to-use digital currency exchange. We are currently working on the engineering and security requirements for each Bitcoin blockchain.”

Romero stated that Coinbase will provide customers with access to coins on both blockchains, although they may restrict access following the fork until both blockchains are confirmed to be stable and secure. Although not directly referenced, the post comes just one day after Bitcoin.org threatened to publicly denounce companies that support SegWit2x and do not publicly commit to meet certain demands.

In particular, one of these demands states that companies must agree to only use the term “Bitcoin” and ticker symbol “BTC” to refer to the original blockchain and may not do anything to “deprive users of their bitcoins”. The Coinbase announcement appears to meet the second condition since it promises that customers will have “access to bitcoin on both blockchains” following the fork. However, Romero says they will not release a detailed plan for how they will name the two blockchains until closer to to the scheduled date for the fork.

On the other hand, Samson Mow, CEO of Blockstream, insinuated on Twitter that Coinbase’s position may infringe the terms of the “BitLicense,” the financial services license bitcoin firms must obtain to work within New York state. Particularly, he pointed to language that forbids licensees from changing a product or service in such a way that it is rendered “materially different” from its status when the license was signed or raises potential safety concerns and operational concerns. The tweet reads:

 

 

SEGWIT2X

Earlier this year, a group of 58 companies led by Digital Currency Group (DCG), representing over 80% of Bitcoin’s hashing power and 20.5 million Bitcoin wallets, agreed on a proposal known as SegWit2x, to activate the Bitcoin Core development team’s scaling and transaction malleability solution Segregated Witness (SegWit) and to subsequently increase the Bitcoin block size to 2MB in November. In March, the group of companies in support of SegWit2x released a joint statement that reads:

“We are also committed to the research and development of technical mechanisms to improve signaling in the bitcoin community, as well as to put in place communication tools, in order to more closely coordinate with ecosystem participants in the design, integration, and deployment of safe solutions that increase Bitcoin capacity.”

Some analysts and developers including Jameson Lopp from BitGo stated that some aspects of the SegWit2x codebase such as its replay protection can be considered as a type of “attack on Bitcoin” because it deliberately intends to confuse Bitcoin users and investors. Moreover, the Bitcoin Core development team and analysts within the cryptocurrency sector criticized the centralization of consensus and development by the members of the SegWit2x agreement.