This Thursday, November 15th, at 4:40:00 PM UTC, the Bitcoin Cash network will be undergoing a hard fork. We want to take this opportunity to explain not only how we will be addressing the fork at SFOX, but also how newly forked cryptoassets fit into our broader philosophy of integrating new cryptoassets into our trading platform.
The Bitcoin Cash hard fork
The upcoming Bitcoin Cash hard fork is the result of a difference of opinion between two camps about the best way for Bitcoin Cash to evolve.
- On one side is the group led by Bitcoin ABC, the primary group of developers that’s been guiding Bitcoin Cash’s development since its fork last year, believes that Bitcoin Cash needs more modifications than large block size in order to scale as an efficient method of value transfer.
- On the other side is the group spearheaded by nChain, a company that believes Bitcoin Cash (like Bitcoin) has strayed too far from the original intent of its anonymous creator, Satoshi; their forked version of the protocol, Bitcoin SV (“Satoshi’s Vision”), will roll back many changes that have been made to the protocol, focusing on increased block sizes as the primary method of scaling their cryptocurrency.
Unscheduled hard forks are highly contentious almost by definition, and this fork is no exception. With regard to Bitcoin ABC, some worry that ABC’s goal of letting miners determine block size, coupled with Bitmain’s support of the fork, will lead to increased centralization of the network around giant Chinese mining pools. With regard to nChain, some question why Bitcoin SV will be reintroducing elements of problematic code for the sake of being allegedly closer to the vision of an anonymous blockchain creator; others are also hesitant about the fork because of nChain’s association with Craig Wright, who has repeatedly claimed to be Satoshi without offering much by way of proof.
How SFOX will be approaching the Bitcoin Cash hard fork
We expect that the hard fork this Thursday will significantly disrupt the BCH network, and some liquidity pools and exchanges may temporarily suspend their operations as a result of this. For this reason, SFOX will be temporarily suspending BCH trading, deposits, and withdrawals on Thursday, November 15th, at 1:00:00 PM UTC. All of our clients’ BCH that is on our platform during the hard fork will remain safely at SFOX until we have determined that the BCH network is stable again, at which point we will resume all normal BCH services.
We will take a snapshot of all our clients’ BCH balances at 4:40:00 PM UTC. We will evaluate the viability of Bitcoin SV, as applicable, using our forthcoming criteria and decide whether or not to enable it at a later date. One dimension of our criteria is that the technology of a cryptoasset is efficient, and this cannot be determined for Bitcoin SV at this stage.
SFOX’s approach to future forks will be consistent with our new asset enablement philosophy
SFOX’s approach to the Bitcoin Cash fork is consistent with our broader philosophy of enabling cryptoassets for trading on our platform. Whereas other cryptoasset trading venues have focused on adding as many cryptoassets as quickly as possible, we have aimed to give our clients the best support possible by only enabling a cryptoasset after we have vetted it across multiple dimensions and confirmed that it can be safely traded without exposing traders to undue risk.
A forked cryptoasset is a new cryptoasset. While a new cryptoasset that has forked from a cryptoasset we have already enabled may warrant a truncated evaluation process relative to a cryptoasset from a totally different blockchain, we still need to take the time to observe and evaluate the new cryptoasset on its own terms. For instance, the old code that BCH SV will be reinstituting could possibly bring new security concerns and additional risk to the blockchain — case in point, some worry that the fork’s updated code will compromise replay protection, reducing the security of holders’ funds.
We will be closely monitoring the forked blockchain that may result from this most recent proposed hard fork to determine whether it meets the standards of technological soundness, fair governance, and utility that we expect of the assets enabled for trading on our platform. You can expect to hear updates from us as the situation develops — and you can also expect to hear more about the details of our asset enablement criteria in the near future.
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What is Bitcoin Cash?
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