Business 23 October 2017Jasmine Solana
Here’s how exchanges plan to deal with SegWit Gold
With only a few days to go before the Oct. 25 fork, cryptocurrency exchanges and service providers have started coming out of the woodwork to reveal their contingency plans for SegWit Gold (SWG).
SWG is a project led by Jack Liao of Hong Kong mining firm Lightning ASIC that seeks to change the proof-of-work (PoW) algorithm, which may ultimately end in the loss of the mining community since it will lose the network of computers that secure the Bitcoin (BCC) network.
The SWG hard fork is expected to take place at block 491,407, which is estimated to occur on Oct. 25. And as that day comes closer, cryptocurrency-related companies have been announcing their official stance on the new currency.
San Francisco-based cryptocurrency exchange and brokerage service Coinbase declared that it will not support the upcoming fork because the SWG protocol “will be incompatible with the existing version of Bitcoin.”
“At this time, Coinbase cannot support [SegWit] Gold because its developers have not made the code available to the public for review. This is a major security risk,” Coinbase stated in a blog post. “Coinbase’s current priority is to add support for SegWit2x, followed by [BCC]. We will continue to monitor the development of [SegWit] Gold, and if its network proves to be both secure and valuable, Coinbase may decide to support it at a later date.”
Another company that is not supporting SWG is U.S.-based exchange Bittrex. On its website, the company said SWG does not meet the criteria to be listed on the exchange. Bittrex plans to suspend BTC-related transactions at block 491,263, and the wallet will remain closed until the on-exchange snapshot is complete.
“If you have a [BTC] balance on Bittrex during the BTG snapshot block 491,407 occurring approximately on October 23, 11pm PT (6am UTC), you will be additionally credited the equivalent amount of [SWG] on a 1:1 basis. i.e. 1 BTC on Bittrex held during the on-exchange snapshot will get you 1 BTG. BTC held on orders will also be credited. Only the BTC held on your account is eligible for BTG,” Bittrex stated.
Meanwhile, wallet provider Coinomi will be supporting SWG tokens. In a Medium post, the company said customers with BTC in their Coinomi wallet “don’t need to do anything in particular” and will receive SWG after the fork by following the exchange’s step-by-step process.
France-based Ledger Wallet announced on Twitter that it “will add immediate support for [SWG] for if/when the code is available, with replay protection, and if it’s successful/valid… just hold your BTC in a Legacy or Segwit address before. Nothing else necessary.”
Japanese exchanges weigh in
So far, only one exchange in Japan will trade SWG.
BitFlyer, Japan’s largest cryptocurrency exchange by volume, said it will credit its customers with an amount of SWG corresponding to the amount of BTC prior to the split. The company also said that services for buying, selling, depositing and sending SWG are in the pipeline for release.
“No suspension of service is scheduled around the split. All bitFlyer services will continue running as usual,” the company announced. “If the [SWG] split is deemed by bitFlyer to be permanent and secure in regards to customer assets, you will be able to own both BTC and [SWG] in your bitFlyer account.”
Coincheck, meanwhile, said it will also distribute SWG tokens, but only “after we confirmed its security and stability.”
“We are planning to provide [SWG] if a [SWG] split occurs. However, if any of the following happens and we determine it’s difficult to protect customers assets or difficult for us to provide stable service we may not be able to provide [SWG],” the company said.
Specifically, Coincheck is on the lookout for the possibility of insufficient replay attack protection, unstable block creation process or the fork not having enough miners, and “in a case when there’s vulnerability, and there’s no adequate measure for it.”
The risk of replay attacks and the new blockchain’s instability are also the reasons why Bitpoint is on a wait-and-see approach when it comes to handling SWG, although the company said SWG “will be given to customers according to the number of coins held at the time of the split.”
Exchanges that have no plans to distribute SWG are Zaif and Fisco. Both companies announced that they will not support SWG nor credit its customers’ account balances, with Zaif saying it will not move SWG or exchange it for other currencies “for purpose other than storage.”
Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.
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