Bitcoin wallet service Xapo has announced how it will approach the SegWit2x hard fork that is scheduled for mid-November.
In a blog post published on the company website, Xapo co-founder and COO Federico Murrone stated that Xapo will support the blockchain with the most accumulated difficulty but will make the coins on the minority chain available for customers to sell or withdraw.
“Xapo’s policy in regards to forks is that, when there is a fork, we always follow the chain with the most accumulated difficulty and we make the minority chain available to our customers for them to sell or withdraw from Xapo,” Murrone writes.
Significantly, Xapo is also going to assign the “Bitcoin” label and BTC ticker to the chain with the most accumulated difficulty, and will name the minority chain either BC1 or BC2, depending on which it is:
“We are going to call the chain with the most accumulated difficulty Bitcoin or BTC. If the minority chain is the one with 1MB blocks we are going to call it BC1 and if the minority chain is the one with 2MB blocks we are going to call it BC2,” the post continues.
With this decision, Xapo diverges from some other prominent companies — such as bitcoin exchange Bitfinex — who intend to continue to list the incumbent blockchain under the ticker BTC and assign the forked chain with the ticker B2X.
Unsurprisingly, SegWit2x opponents had strong words for Xapo. BitGo engineer Jameson Lopp, for instance, alleged that SegWit2x supporters have not properly considered the “collateral damage” the fork might causet
“Price volatility is already difficult enough for the ecosystem to handle,” Lopp tweeted. “I’m not sure it can deal with namespace volatility on top of that.”
Xapo is a New York Agreement signatory, so they presumably expect that the SegWit2x chain will accumulate the most difficulty since it appears to have support from most miners. However, mining pool ViaBTC — another NYA signatory — has already signaled its intent to allow users to mine either blockchain, and it would not be surprising if other pools followed suit.
Moreover, miners are very profit-driven — just look at how wildly the bitcoin cash hashrate swings when its difficulty adjusts downward and it becomes more profitable to mine than bitcoin. Consequently, there is a significant possibility that miners who initially mine the SegWit2x chain could switch back to the incumbent network if it maintains a profitability edge, raising questions about how Xapo would respond to this scenario.
However, Xapo did not specify when they would make the determination about which blockchain had the most accumulated difficulty, nor did Murrone explain whether the service would reverse its stance if what was originally the minority chain becomes the majority chain later on.
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Last modified: May 21, 2020 9:12 AM UTC