BITCOIN

BitGo wallet plans to treat Bitcoin Unlimited as altcoin

TAGs: Ben Davenport, Bitcoin, Bitcoin Unlimited, BitGo

As the rumblings of a potential bitcoin hard fork grow louder, wallet service BitGo has released an advisory for its customers on what to do in the case of a new chain.

BitGo wallet plans to treat Bitcoin Unlimited as altcoinIn a blog post, BitGo co-founder and Chief Technical Officer Ben Davenport noted that they didn’t ascribe a high probability of a hard fork taking place until recently. But since there is “a distinct possibility” of it happening, the wallet service said it wants its customers prepared.

But first a bit of background: If you recall, bitcoin developers are currently embroiled in a heated debate on whether the block chain size limit should be supported. One group wants to build a platform called Bitcoin Unlimited, which would not put any restriction on the size of blocks for processing transactions, while another faction wants to maintain the original version called Bitcoin Core.

Now, supporters of the Bitcoin Unlimited want to set up a “hard fork” for the digital currency marketplace. Essentially, this will be an alternate software platform for bitcoin trading, but it’s one that’s incompatible with the current platform, potentially leading to two versions of the cryptocurrency.

Some 20 bitcoin exchanges have already addressed the possibility of having two versions of bitcoin, noting that in the event of a split, they will list Bitcoin Unlimited as an alternative cryptocurrency under the BTU or XBU tickers.

BitGo, however, announced that it will not support Bitcoin Unlimited, which is said “does not meet” the wallet’s tests “for being a supportable fork today.”

“There are serious problems with ‘emergent consensus,’ which can result in ongoing network splits and chain reorganizations of arbitrary length, depending on how different groups of miners set their consensus parameters. Finally, there are serious concerns about the general code quality and peer review process of the Bitcoin Unlimited code base itself,” Davenport said. “As such, we will not be able to provide support for a hard fork caused by Bitcoin Unlimited in its current form.”

Any hard fork introduced without industry-wide consensus will be an altcoin, regardless how much hash power that coin has. The majority of bitcoin exchanges share the same view, Davenport said.

“If such fork were executed in a supportable way, and there were sufficient customer and market demand for the new coin, we would add support via our API as soon as technically possible,” the BitGo executive said.

So what should BitGo users do if the Bitcoin Unlimited hard fork launches?

First, pause any outgoing transactions from the wallet service, according to Davenport. Then, keep in close contact with BitGo for assistance in moving coins safely or in splitting coins.

“Once a hard fork has resolved itself back to a single chain due to it being abandoned by miners, or a splitting plan has been deployed, it will be safe to transact again on the original chain,” Davenport said.

Current bitcoin price

The price of bitcoin has dropped to $961 during early Monday morning’s trading.

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