At the end of this month of July, during several days, the Bitcoin network might go through one of the most contentious changes in its history. (Read more about it here). There are several competing proposed changes that could lead to a Hardfork of Bitcoin. (Read about the important dates here). At Bity we are already preparing for this.
What can we learn from the Ethereum Hardfork?
When preparing for such an event, the first thing you might do is look for past experiences. The most recent one we had to go through is the Post-DAO Ethereum Hardfork in 2016. The situation was very different as there was a large consensus between users, miners and developers to follow the proposed changes. However, which came as a surprise to us, the classic chain kept on going. It has since then developed its own community. Like many, we had to implement replay-attack prevention as soon as it was clear the classic chain was surviving.
We learned the worst can always happen. Even with a strong consensus, a Hardfork can happen. It is clear now, within the crypto-economy, the ability to manage hardforks for our users will be one of the key differentiators for providers like us. So we will prepare for a Hardfork scenario.
What will Bity do when all of this happens?
We will stop any Bitcoin trading as soon as we detect non-reversable changes on the network. This could happen as soon as 29th of July.
We will implement replay-protection. This is being worked on right now. We are planning to opensource tools for the community if we succeed in building workable replay-protection scripts.
We will start Bitcoin trading as soon as the dust settles and we know which chain(s) is(are) surviving.
Why stop trading?
Our main focus is security, including security of funds. When these changes are pushed on the network, we don't feel we can provide such security to our users while maintaining a continuous service. This could of course change depending on the availability of tools and/or developments on the network.
But I want to buy and sell when the price moves!
We believe that the security of our users funds is too important to compromise. If you want to trade during that time, prepare yourself. Find exchanges that will continue offering offchain trading and make sure you have enough liquidity already deposited at the exchange. Exchanges are likely to temporarily suspend deposits and withdrawals. We strongly advise against onchain trading during that period.
What about Ether and other cryptos?
We will continue to provide Euro-ETH, CHF-ETH, Euro-REP, CHF-REP and ETH-REP during that period of time. We will be only stopping BTC related pairs.
Which changes do Bity support?
As individuals within Bity we might have different opinions. As a service provider working with several cryptocurrencies, we will always support chains that retain the community's ideals. This includes a large user base, a strong and inclusive development team, a diverse mining landscape and a strong vision. Regardless of the outcome, we will continue to work and support the community. We are focusing on replay protection and protection of our users. Moving forward is the only option.