Coinbase has reversed its earlier position and announced it will support Bitcoin Cash. The catch is: users will have to wait until January 2018 to withdraw the new currency.
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Support Means Withdrawals Only, for Now
By “support”, Coinbase means it will allow wallet users to withdraw BCC/BCH. The company will decide whether to enable trading at a later date. In the meantime, it’s keeping users’ Bitcoin Cash tokens in storage.
Director of communications David Farmer posted the news on the company blog, saying:
We may not always be first in adding an asset, but if we do, you can be sure that we’ve invested significant time and care into supporting it securely. We believe this is the best approach for us to maintain customer trust.
The most popular cryptocurrency exchange in the U.S. made its decision “based on factors such as the security of the network, customer demand, trading volumes, and regulatory considerations”.
It’s a complete about-face for Coinbase from just a week ago. Previously, the company was adamant it would not support a forked token. Farmer also wrote on 27th July:
“In the event of two separate blockchains after August 1, 2017 we will only support one version. We have no plans to support the Bitcoin Cash fork.” The company stated firmly its customers would not have access to BCC tokens and advised interested parties to withdraw their BTC from Coinbase wallets.
Coinbase’s decision may have been partly based on an online petition and fundraising campaign by users to support BCC/BCH. The campaign website also hints at legal action.
Echoes Coinbase’s Decisions After Ethereum Fork
Both decisions echo last year’s confusion over the Ethereum hard fork, which also resulted in two currencies, ETH and ETC (Ethereum Classic).
After the July 2016 fork Coinbase also said “At this time, Coinbase has no plans to support ETC,” though added that it would continued to monitor and evaluate demand. The company only added support for ETH itself after the fork.
However CEO Brian Armstrong later announced support for ETC, writing “I think it’s safe to say we underestimated the attention that the minority chain would get as a result of the hard fork.”
Coinbase allowed users to withdraw ETC, but never enabled deposits, storage or trading. In December 2016, it discontinued all support for ETC.
As a regulated U.S.-based exchange with a large user base, Coinbase approaches policy decisions very cautiously. A rash decision that led to large-scale loss of customer funds could be incredibly damaging.
In any case, though, users who wish to retain full control over their cryptocurrency balances should always store them on wallets with local private keys.
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Images via Coinbase, Ethereum Classic, Pixabay