Xapo Receives Criticism Over its Plan to List Bitcoin as BC1 if it Becomes Minority Chain

Posted in: Markets
October 11, 2017 11:58 PM UTC

The probability of the original Bitcoin blockchain or legacy chain becoming the minority chain after the November SegWit2x hard fork is slim, but Xapo has received criticism from experts in the cryptocurrency sector over its intention to list the original Bitcoin blockchain as “BC1” if the SegWit2x chain turns out to be the majority chain.

Bitcoin Investor Describes SegWit2x Support as “Commercial Suicide”

Earlier this week, prominent BItcoin investor and Atlanta Digital Currency Fund partner Alistair Milne explained in an analytical blog post that expressing public support for SegWit2x from Bitcoin and cryptocurrency startups will be an act similar to committing “commercial suicide.” Milne wrote:

“Businesses will not commit commercial suicide. The largest Bitcoin companies are already showing they will support both tokens in the interim and therefore allow the market to decide the victor. A new token cannot practically be called Bitcoin / BTC as that name is already taken and it would invite chaos.”

As CCN.com previously reported, Bitfinex and Coinbase, two of the largest Bitcoin wallet and exchanges in the global market, have revealed their intentions to integrate support for SegWi2x, but allow the market and users to decide which chain becomes the majority chain. The Bitfinex development team went as far to explain that the original Bitcoin blockchain or legacy chain will be listed as “BTC” and “Bitcoin” even if SegWit2x gains more hashrate.

Xapo Criticized by Some of the Most Influential and Highly Regarded Experts

On October 9, Xapo, a popular Bitcoin wallet platform and Bitcoin Visa debit card service provider, was heavily criticized by some of the most influential and highly regarded experts, developers, and investors in the cryptocurrency space for its plan to list the original Bitcoin blockchain as “BC1” if SegWit2x emerges as the majority chain.

The Xapo team stated:

“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. 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.”

Almost immediately after the release of Xapo’s statement, Monero creator and lead developer Riccardo Spagni, better known as “FluffyPony,” released a sarcastic statement, noting that he would create a new startup called Xapo if he gathers sufficient support and force the existing company Xapo to rebrand to XP1.

Spagni’s comment is a direct criticism of the Xapo development team’s willingness to rebrand the Bitcoin blockchain, which has been the original and legacy blockchain since 2009, as BC1.

The Community Reacts to Xapo’s Announcement

Tone Vays, a long-time trader and analyst within the Bitcoin sector, also stated:

“If you trust Xapo with the security of your Bitcoin, then you have no idea what a blockchain is, should be using PayPal [instead], and deserve to lose your money.

Jameson Lopp, the lead engineer for BitGo, who remains as one of the more logical minds and voices in the cryptocurrency space, also wrote:

Aaron Van Wirdum, journalist and Bitcoin analyst, advised investors:

Featured image from Shutterstock.

Last modified: July 2, 2020 8:17 PM UTC

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Joseph Young @iamjosephyoung

Financial analyst based in Seoul, South Korea. Contributing regularly to CCN and Forbes. I have covered the stock market and bitcoin since 2013.