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LocalBitcoins to Compensate Users for ‘Bcash’ Holdings, Will Not Support Future Forks

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

Peer-to-peer bitcoin trading platform LocalBitcoins has announced it will not add support for bitcoin cash and will not distribute airdropped coins to users who held bitcoin balances at the time of the fork. Instead, LocalBitcoins has compensated users with bitcoin deposits corresponding to the value of the bitcoin cash given to their accounts.

When bitcoin cash forked away from the main bitcoin blockchain on August 1, all bitcoin holders received “airdropped” BCH balances corresponding to their BTC holdings. Exchanges and wallet services had to decide whether and how to distribute those funds to their customers. Most major order-book exchanges have added support for bitcoin cash trading, while some other services have allowed customers to withdraw their bitcoin cash balances but will not support BCH.

LocalBitcoins, which is one of the world’s most popular P2P exchanges, has decided to take an alternative approach, which they announced in a blog post:

LocalBitcoins has decided against supporting Bcash, for various reasons. Our primary focus is to provide easy access and global liquidity for Bitcoin and to ensure the security of Bitcoins held in customer accounts.

“Bcash” is a pejorative term many bitcoin supporters use to describe bitcoin cash since they do not believe the coin should be allowed to profit from the bitcoin brand. LocalBitcoins says that adding support for Bcash would shift resources away from their primary mission, which is to serve the bitcoin community itself.

Adding support to an alternative cryptocurrency that shares address space with Bitcoin would have significantly shifted resources away from this main focus. We believe supporting Bcash would create confusion and complicated situations e.g. due to the possibility of sending Bitcoins to Bcash addresses, which would result in extra hassle and possibly loss of funds for our customers.

However, LocalBitcoins has decided to compensate customers who were holding bitcoin balances at the time of the August 1 hard fork. To that end, the platform exchanged the bitcoin cash airdropped to customer accounts for bitcoin and credited those funds to customer BTC balances. The service states that eligible customers have now been compensated.

Nevertheless, LocalBitcoins warns customers that they should not expect to receive similar compensation in the future, which is almost certainly an allusion to the potential SegWit2x hard fork currently scheduled for later this year. “You should not expect any previous or future cryptocurrency airdrops to be compensated or supported by LocalBitcoins.com,” the post states.

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