Australia-based bitcoin and cryptocurrency exchange CoinTree has announced its stance for the end of the month regarding the Bitcoin network and potential chain split, which would create multiple versions of Bitcoin going forward.
As you most surely know, around August 1st, 2017, the Bitcoin network may experience disruption due to a situation where a split may occur. This is the first time in bitcoin’s history that an intentional split is likely to occur. Some services are opting to halt trading during the event. CoinTree stated that as one of the only exchanges to store each customer’s bitcoin in their own bitcoin wallet, the risk to CoinTree and its customers is considerably reduced. CoinTree intends to remain operational during this event, subject to their suppliers and partners being operational as well.
One of the risks of the event is that the network may ‘re-organize’, causing previously confirmed bitcoin transfers to become unconfirmed. As a precaution, CoinTree has increased the minimum confirmations required for deposits from two (2) to at least ten (10) confirmations.
This will result in a respective delay with purchases as purchased bitcoin is sent to customer accounts rather than being account credit. The minimum confirmations will be restored to two (2) once the event is over.
The planned split will create a coin called Bitcoin Cash. At this stage, CoinTree has no plans to support this coin on the same level as bitcoin (BTC). Bitcoin Cash would likely be added to the CoinTree list of 40+ altcoins that can be purchased, instead of being added to their ‘Buy Bitcoin’ page.
For customers with bitcoin in their accounts when the split occurs, CoinTree cannot guarantee that their account balance will receive Bitcoin Cash. Once the Bitcoin network resumes normal operation, CoinTree is going to evaluate the best course of action for customers. If CoinTree decides to support the Bitcoin Cash split, it will take some time to implement a solution. CoinTree customers who would like to ensure they receive Bitcoin Cash as a result of the split are advised to withdraw their bitcoin from CoinTree before July 31st, 2017.
CoinTree provided some Q & A to some popular questions users may be wondering about:
Q. Can I lose my bitcoin?
A. Whether you have bitcoin on CoinTree or elsewhere, your bitcoin will be safe during the split. The split will create a new coin called Bitcoin Cash. Existing bitcoin remains untouched.
Q. Which wallet should I send my existing bitcoin to so that I receive Bitcoin Cash when the split occurs?
A. CoinTree hasn’t evaluated the status of bitcoin wallets. Please do your due diligence when picking a wallet to use. If you own a hardware wallet such as a Trezor or Ledger Nano, they have announced support for Bitcoin Cash. Please read their documentation prior to sending your bitcoin and ensure you understand how they will handle the split.
Q. What will happen if I send bitcoin from CoinTree before the split?
A. Bitcoin sent before the split will be normal bitcoin. Once the split occurs, you will have access to bitcoin and Bitcoin Cash if the service you sent it to supports it.
Q. What will happen if I send bitcoin from CoinTree after the split?
A. The service you send bitcoin to will only see bitcoin and not Bitcoin Cash. If CoinTree decides to support the Bitcoin Cash split, you will later be able to send Bitcoin Cash from your CoinTree account. CoinTree does not guarantee the split will be supported, nor is there an ETA at this stage.
Q. Will purchases be impacted?
A. As a precaution, the number of confirmations required for account actions will be increased until the network resumes normal operation.
Q. Can I buy bitcoin before and during the split?
A. Yes, purchases will remain available and be working as per usual before, during and after the split. The only expected impact is that the number of confirmations required for account actions will be increased during the split from two (2) to at least ten (10). This will increase the time it takes for bitcoin purchases to complete. Although the completion time will be longer than usual, you will receive the same amount of bitcoin as prices are locked in when they are first processed.
Q. What will happen if I buy bitcoin from CoinTree after the split?
A. You will receive bitcoin only and not Bitcoin Cash. The Buy Altcoins page will likely have Bitcoin Cash available for purchase for those who want to acquire it after the split occurs.
Q. What will happen if I start a purchase pre-split but don’t pay until after the split?
A. CoinTree processes purchases at the time of receiving payments. If a payment is received and processed after the split, you will receive bitcoin only and not Bitcoin Cash, even if the purchase was created pre-split.
Q. What will happen to the price of bitcoin?
A. In short, no one knows. There’s a lot of speculation and opportunists looking to capitalize on the uncertainty. During a time like these, we would like to remind everyone not to panic buy or panic sell. Set your position now and stick to it.
Q. What about other potential forks such as UASF?
A. The reason our statement is out today is so that CoinTree could take the necessary time to evaluate the likelihood of each potential fork activating. With segwit2x locked in during the previous weekend, the chances of other forks occurring have greatly reduced. CoinTree will continue to monitor the situation and will provide an update if anything changes.