Statement possible split in Bitcoin
Statement possible split in Bitcoin
A split can be initiated in the Bitcoin network when a version of Bitcoin with incompatible rules gains traction. This is known as a hard fork.
Such an alternative version has been introduced: Bitcoin Unlimited. The main difference in this version of the Bitcoin software is that it allows (much) bigger blocks in the Bitcoin blockchain, utilizing so-called Emergent Consensus.
Bitonic does not oppose hard forks in itself, nor do we reject Bitcoin Unlimited a priori. However, we do have our reservations. This is why we decided to sign the contingency plan on hard forks.
Our stance on hard forks
We will not consider contentious hard forks (without industry-wide consensus) as Bitcoin. Instead we will consider it an alternative cryptocurrency which we will not, out of principle, support. We cannot exclude the possibility that a contentious split in Bitcoin eventually gains widespread support, overtaking the original. We will review our approach as the situation develops.
A contentious hard fork without a clear planned activation period creates a very unpredictable and dangerous situation for us. For that reason we cannot and will not run software that advocates such a split in our production environments. Moreover, we cannot with full confidence offer our support for it to our customers.
A property of hard forks is the common history pre-split, which makes transactions afterwards valid on both versions of the network. The consequence of this is the possibility of replay attacks against our and our customers' funds. For this reason there will have to be at least a protection against these type of attacks before a fork can be executed safely.
Our stance on Bitcoin Unlimited
In the event Bitcoin Unlimited satisfies our minimal requirements for a safe hard fork (see above), we still have two big operational issues with this version of Bitcoin:
Bitcoin Unlimited introduces a way for miners to change block size dynamically, allowing for spontaneous network splits. Keeping up with the latest valid chain would impose an increased technical strain and costs on us as a Bitcoin company.
Bitcoin Unlimited proposes unpredictable blockchain growth. Bitonic cannot reliably offer the same continuity of our systems in the event of sudden large block size increasements. The same goes for validation times, which might grow exponentionally, making it hard for us to service our customers in a timely fashion.
For these reasons we feel we are not financially and technically capable of supporting Bitcoin Unlimited based on the "Emergent Consensus" principle, not for ourselves and not for our customers.
What happens in the event of a contentious hard fork?
We hope a fork like this in the Bitcoin network will not come to pass. In the event such a split happens we will be forced to temporarily suspend operations for the reasons mentioned above. Only when we can safely allow transactions from and to our customers can we continue our services. As a result of the fork, there will probably be a delay before we can reliably send transactions for purchases as well as a delay in payout for sales orders (more confirmations required).
We will do everything in our power to allow for the safe buying and selling of bitcoins according to the consensus rules of the original chain via our service.
We therefore endorse the Bitcoin Core scalability roadmap.
For more information on Bitcoin Unlimited and the proposed hard fork, see the article by Aaron van Wirdum at Bitcoin magazine.