As many will remember, August 1st 2017 was “Fork Day” – Bitcoin was hard forked into two versions of bitcoin – known as “Bitcoin” and “Bitcoin Cash”. We wrote about this at the time – you can read what we wrote here.
On October 25th, it’s expected that there will be a further hard fork of the bitcoin blockchain when Bitcoin Gold forks away from the main chain. I’ve attempted to summarise our thoughts on this and justify these here.
The TL DR is that our opinion is basically the same as it was for August 1st fork – we won’t support a contentious hard fork.
What is a blockchain (hard) fork?
A hard fork is when the bitcoin software is changed in such a way as to become incompatible with the previous version, such a through a loosening of the rules. An example would be increasing the blocksize – the old software will not accept the blocks which are greater than 1Mb. By contrast a soft fork can be considered to be a tightening of the rules (such as decreasing the blocksize). In doing so the old software will continue to work with the new software (e.g. accept blocks smaller than 1Mb), but will potentially issue incompatible blocks which the upgraded software will reject.
Solidi’s position is that we will not support a contentious hard fork. We will go with the consensus of our customers and the industry by adopting the most most popular blockchain post fork. In most cases we expect this will mean that we will not adopt a new blockchain post fork and will remain on the existing chain.
The notable exception to this would have been when Ethereum split into Ethereum and Ethereum Classic – in this situation we would have gone with the consensus and adopted Ethereum and not added support for Ethereum Classic.
In all situations we will record all customer’s balances at the point of the fork and should we ever support the fork, then customers will be credited with the appropriate balance in the forked currency.
Forks are expensive
The cold truth is that forks are expensive for companies such as Solidi. Solidi is a small company with limited resources. To integrate a new blockchain in Solidi we need to go through a number of steps not just to integrate the new blockchain software and credit the appropriate balances, but also to audit the software, understand possible attack vectors (e.g. replay attacks), secure our network and then pay for the ongoing support costs. This is essential to ensure the safety of your coins.
Supporting a new coin, particularly a coin resulting from a hard fork can conservatively require as much as an entire month of engineering effort.
For that reason, we generally will not do anything more complicated than follow the majority of users and invariably remain on the existing blockchain. We may sometimes switch chains (e.g. Ethereum) but for various technical reasons it is highly unlikely we will support both chains immediately following a fork.
Bitcoin Gold – October 24th 2017
Bitcoin Gold is expected to fork from Bitcoin at block 491,407 on the 24th Oct 2017 at 10.00 UTC.
As of writing, Solidi has not seen code which we believe would pass our internal audit required to securely install and run this on our systems. This opinion seems to be widely held by most exchanges.
As such, we will not be supporting the Bitcoin Gold blockchain.
However, we will record all the balances held by customers so that you can be awarded the appropriate amount of Bitcoin Gold should we ever support it.
Taking Advantage of a fork
If you want to take advantage of a fork, then you must withdraw your coins now to an external wallet, which you control so that you can be assured of getting both sets of coins.
If we do decide to support both chains following a fork, there is no guarantee how long this will take to achieve, but you will eventually be credited with the balance you held at the point of the fork.
Don’t hesitate to get in contact!