Bittrex, the world’s third largest cryptocurrency exchange by trading volume behind Bitfinex and Bithumb, officially announced that it will not list Bitcoin Gold (BCG) trading upon its hard fork in November.
Bittrex Concerned With the Bitcoin Gold Codebase
On Sunday October 22, the Bittrex team released a statement on Bitcoin Gold and emphasized that the Bittrex development team will not be integrating Bitcoin Gold trading due to its lack of code testing, auditing, and replay protection.
“At this time, the information and codebase presented by the Bitcoin Gold team is not in a functional state and Bittrex will not commit to opening a Bitcoin Gold trading market. When considering adding tokens to Bittrex exchange we look at the risks involved. Bitcoin Gold does not satisfy our criteria for safety for our users.”
The exchange further noted that the process of integrating support for Bitcoin Gold trading or implementing support for any hard fork requires the trading platform to halt its services for at least 24 hours to prepare. For instance, in the case of Bitcoin Gold, if Bittrex were to integrate BCG trading, Bittrex would have to disable bitcoin wallets for an entire day of operation, which would negatively affect millions of users and accounts with large sums of funds.
“Taking a snapshot of the Bittrex exchange Bitcoin wallet is also a large disruptive undertaking that requires over 24 hours of preparation (Bitcoin deposits and withdrawals are also suspended during this time) and should not be taken lightly,” said the Bittrex team.
Precedent For Future Forks and SegWit2x Hard Fork
As Bitcoin developer Jimmy Song explained, the Bitcoin Gold hard fork proposal was introduced rather abruptly, by China-based bitcoin miner Jack Liao. The motive behind the Bitcoin Gold project is to create an ASIC-resilient mining ecosystem, wherein the gap between GPU/CPU mining and ASIC mining is relatively small.
But, such alteration in the Bitcoin proof-of-work consensus protocol (PoW) is a minor change to the Bitcoin codebase, and is an unnecessary, impractical, and simply pointless, considering that other alternative cryptocurrencies (altcoins) have attempted a similar model in the past few years and none of them turned out to be successful.
The mining industry for most leading cryptocurrencies such as bitcoin, Ethereum, and Litecoin is highly profitable for mining pool operators and mining equipment manufacturers. Earlier this month, Chris Burniske, a prominent bitcoin analyst and researcher, revealed that the bitcoin mining industry is set to bring $4 billion in 2017 alone, and likely higher returns in the upcoming years.
Consequently, in the past few months, major conglomerates in the traditional technology sectors such as Japan’s multi-billion dollar corporation GMO entered the bitcoin mining industry, with the vision of establishing a mining center and manufacturing its own line of bitcoin mining equipment.
Hence, despite changes to the consensus protocol, miners will always adopt and manufacture better equipment to further the gap between CPU/GPU miners. As bitcoin investor Alistair Milne explained:
“Miners follow the money, they do not lead the money. A rational miner fears the market negatively valuing the tokens they are trying to mine. They are extremely sensitive to profit and loss.”
Last modified: March 4, 2021 5:00 PM