I’ve been asked multiple times how I think Coinbase (and other exchanges) will handle the Segwit2x hardfork in November. For background, although I’m no longer working at Coinbase, I was previously Director of Engineer at Coinbase and led the GDAX team, and I still give Coinbase advice. This is how I think this 2x hardfork will play out…
With the ETC and BCH hardforks, it was clear that those 2 coins will be the minority fork, so it was safe to use a wait-and-see approach. So Coinbase didn’t support those forks initially. And only if there was traction on those forks, would Coinbase spend the time and resources to support those forks and let people access their coins on the minority chain. That is what Coinbase did with both ETC and BCH hard forks.
For the 2x hardfork, things are a bit more tricky. 2x is supposed to be an upgrade to the Bitcoin protocol. What that means is that ideally everyone should upgrade to the 2x code before the hardfork and the hardfork will just happen and everyone would just switch to the new chain and no one would be on the old chain.
Exactly how it should happen. All signatories to the NYA agreement that is, the miners, exchanges, wallet providers and users would have upgraded to btc1, within the 3 months notice given. Anyone still on the old chain after the fork will be on their own. They are forced to upgrade to be compatible. That is how Bitcoin is designed to work.
This only works if everyone did this. Because this is a hardfork, if not everyone upgrades, then there will be 2 chains. The supporters of 2x and the NYA agreement believe that if all the mining hashrate switches over to the 2x chain, the original chain will be dead and no one would use it. But how is that different than fiat currency, where miners decide (by fiat) that your old bills are no longer valid?
I think he has lost the plot here. The reference to fiat is irrelevant and makes no sense.
Thankfully, Bitcoin doesn’t work this way. It’s the people who use the coin that gives it value, and miners will mine the coin that makes them the most money. And right now, pretty much all the Bitcoin Core developers and a large part of the community including a lot of prominent figures in this space have come out against this hardfork.
No. Bitcoin is designed to work that way, and No it is mainly the core developers and alot less of the prominent figures that are against the hard fork. More interested parties than not signed the NYA agreement.
Because this 2x hardfork is so contentious, Coinbase cannot handle it the same way they handled the ETC and BCH hardfork. In other words, they can’t just choose one fork and ignore the other fork. Choosing to support only one fork (whichever that is) would cause a lot of confusion for users and open them up to lawsuits. So Coinbase is forced to support both forks at the time of the hardfork and need to let the market decide which is the real Bitcoin.
No. They already have experience on how to handle a hard fork and they will be repeating it. There are no laws that can compel anybody to support a version of software that they have upgraded and superseded. You certainly can't sue Microsoft for not supporting Windows XT or 7 and besides Bitcoin is open source.
Now the question is which fork will retain the “BTC” and “Bitcoin” moniker and which will be listed as something separate. Although Coinbase signed the NYA agreement, I do not believe that this agreement binds them in any way with respect to how to name the separate forks. For practical reasons, the BTC symbol belongs to the incumbent, which is the original chain. This is because there will be no disruption to people who are running Bitcoin Core software and depositing/withdrawing BTC to/from Coinbase and GDAX. And only if you trade the coin on the 2x fork, would you need to download and run the BTC1 Segwit2x client.
No. Everything just carries on. There is no disruption. The user should not notice any difference. They will keep sending Btc and receive Btc. Nothing changes. There is nothing for users to do except to keep using Btc the way they have always done.
If the market really supports this Segwit2x upgrade, that coin will trade at a higher price. And then we will all agree which is Bitcoin and which is a minority fork. There will be no contention at that point.
Total rubbish. There is no rule to say that a coin that trade at a higher price should be Bitcoin. There was speculation that the coin with the longest chain should be Bitcoin and as we have seen that this is not true. We now think that the coin with the most work done is Bitcoin, but even this may not be the case. The truth is that Bitcoin is the coin that everybody agrees is Bitcoin. It just resolves itself. Nothing else matter. It is the same with accepting Bitcoin as money. There is no need to prove before use. It just happens.
This is the advice I have given to Coinbase and I expect Coinbase and other exchanges to handle this Segwit2x hardfork in this way.
I thought advisors give their advise under confidentiality agreements, unless it is unsolicited advise.
Source - bitcoinandtheblockchain.blogspot.com
