Sunday, December 4, 2022

Bittrex: If SegWit2x Splits Bitcoin, We’ll Recognize Only 1MB Chain

Bittrex: If SegWit2x Splits Bitcoin, We’ll Recognize Only 1MB Chain

Leading cryptocurrency exchange Bittrex today released a statement confirming it will recognize only the incumbent 1MB blockchain as the legitimate Bitcoin, in the event Segwit2x (S2X) forces a chain split.

Also read: TREZOR Devices Will Support All Forked Coins, Says SatoshiLabs

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Bittrex Joins Others With S2X Concerns

The popular cryptocurrency-only trading platform is the latest in a series of service providers to announce a S2X hard fork policy.

Bittrex’s Julian Yap outlined the exchange’s position by stating that “BTC will remain the existing Bitcoin chain with 1MB blocks until the industry and ecosystem demonstrates a clear chain preference”.

Opponents of the S2X implementation applauded Bittrex’s stance:

Others seemed happy at the chance of receiving another air-dropped token:

Referring to the contentious nature of the so-called “New York Agreement” — signed in May 2017 by industry representatives at the New York Marriott hotel behind closed doors — Yap noted that “Bittrex did not sign the NYA and endeavors to be neutral for any fork. Our priority is the safety of customer funds.”

Lack of Replay Protection Still the Main Problem

Prioritizing customer funds has become a problem for many exchanges, due to the fact that S2X developers will not be implementing replay protection.

Bittrex logoWith over 80 percent of mined blocks signaling to support SegWit2x, a chain split becomes virtually guaranteed. Without optional, two-way replay protection (the option to make a transaction that is valid on one chain not-valid on the other, in either direction) “Bittrex must undertake extra measures to ensure that … user coins are preserved on both chains.”

The potential for problems is something Alex Morcos of Chaincode Labs outlined in a recent Medium post where he stated:

“There is no downside to implementing optional two-way replay protection. There is no argument against it”, but since SegWit2x will operate without it, companies must “painstakingly [implement it] at the individual company level with weeks of engineering effort. And the downtime will be required because transactions will have to be manually manipulated in order to create outputs spendable on only one of the chains.”

In order to further minimize user risk, Bittrex will only provide a market for 1MB Bitcoin. However it will initialize a 24-48-hr observation period (similar to other exchanges) with the option to extend it if the outcome is not clear.

During this time, starting from 24 hours before block 494,784, deposits and withdrawals will be disabled. They will remain closed “until the hard fork block is complete and it is deemed safe to open.”

Trading on the site will remain open and customer balances in BTC will be credited with SegWit2x chain-split tokens in due course, leaving Bittrex the option of opening a new “B2X” market.

Do you agree with Bittrex’s decision? Why or why not? Let us know in the comments.

Images via Bittrex, Pixabay

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