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Coinbase Updates SegWit2x Stance; May Call Forked Chain ‘Bitcoin’

Last Updated March 4, 2021 5:00 PM
Josiah Wilmoth
Last Updated March 4, 2021 5:00 PM

Bitcoin exchange Coinbase has clarified its position on the upcoming SegWit2x hard fork, stating that it will use accumulated network difficulty to determine which blockchain the company will label “Bitcoin” following the fork.

On Monday, David Farmer, Coinbase’s director of communications, published a blog post revealing the rapidly-growing bitcoin exchange’s stance on SegWit2x. In the announcement, he seemed to indicate that Coinbase would continue to call the incumbent blockchain “Bitcoin” and would label the forked blockchain “Bitcoin2x”. From the post:

Following the fork, Coinbase will continue referring to the current bitcoin blockchain as Bitcoin (BTC) and the forked blockchain as Bitcoin2x (B2X).

This was a significant development since Coinbase had expressed firm support for SegWit2x and had signed the New York Agreement (NYA). One industry observer called the announcement the “nail in the coffin” for the scaling proposal.

However, Tuesday evening, Coinbase published another blog post  that appeared to walk back some of what they had said in the earlier post. Specifically, the company explained that the term “Bitcoin2x” would only be used to describe the forked chain at the time of the fork until a further determination was made.

At some point following the fork, the chain “with the most accumulated difficulty” will earn that label, although the exchange said it may consider other factors as well:

“[After the fork] We are going to call the chain with the most accumulated difficulty Bitcoin,” Farmer clarified, adding that, “We will make a determination on this change, once we believe the forks are in a stable state. We may consider other factors such as market cap or community support to determine stability.”

Coinbase chief executive Brian Armstrong apologized on Twitter for the confusion that the original post caused and explained that he believes “the market should decide (not us) — so our attempt is to remain as neutral as possible here.”

Litecoin creator Charlie Lee — a former Coinbase employee — criticized the move, saying  that it made the hard fork “even more uncertain and confusing.” Marek “Slush” Palatinus, the founder of SlushPool, was more pointed in his objection. “Hash power does not determine what is Bitcoin, and you know that,” he said .

However, as Armstrong noted on Twitter, the company still intends to factor community support and market cap into its decision, although it has not stipulated what role they will play. “Determining when the chains are ‘stable’ is a judgment call,” he conceded.

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