Upcoming Bitcoin Hard Fork: Modified Exchange Operations
Due to a disagreement among Bitcoin developers and other community stakeholders, Bitcoin will undergo a “hard fork” in mid-November; essentially, it may split into two separate and viable cryptocurrencies each vying for the name Bitcoin. Previously, Bitcoin underwent a hard fork on August 1, 2017, splitting into two separate chains; however, both communities were in agreement as to which chain would be called Bitcoin, and which chain would be called Bitcoin Cash. All signs point to the upcoming hard fork not having the same consensus with regard to naming.
In light of this, beginning approximately one day before the anticipated time of the fork (estimated to be November 16, 2017), Gemini will temporarily disable all bitcoin withdrawals and crediting of bitcoin deposits. Both U.S. Dollar (USD) and ether (ETH) deposits and withdrawals will be unaffected.
Our policy on chain splits has been in place for several months. To reiterate what we wrote then:
- The “BTC” balance and trading activity you see on Gemini will likely reflect the chain with the greater total difficulty.
- We may choose to eventually open new order books for the chain with less total difficulty.
- We will make every effort to support withdrawals of the chain with less total difficulty, if it ends up having a significant amount of hash power, exchange volume, or economic value.
We have decided to use this existing policy for the upcoming hard fork, and we will be measuring total cumulative computational difficulty of the blockchain to determine what we will call Bitcoin and BTC and on the Gemini platform.
The cumulative computational difficulty is an objective and observable metric that is impossible to fake or “game.” It may not be a usable framework in all future chain split situations, but it works for this one. While we fully appreciate that some may disagree and have differing viewpoints on the naming of a given fork, we have yet to come across another framework that achieves the qualities mentioned above.
During this time, our BTC/USD, ETH/USD, and ETH/BTC matching engines will remain open for trading. After at least a 48 hour period following the hard fork, once we believe the Bitcoin network has stabilized, and once we are confident that all customer funds on the exchange have been fully protected from transaction replay, we will reopen deposits and withdrawals on the network that has the greatest cumulative computational difficulty. We will then work to support withdrawals on the chain with less cumulative difficulty if it ends up having a significant amount of hash power, exchange volume, or economic value, and possibly even open new order books.
If you have any questions, please contact Gemini customer support at firstname.lastname@example.org.
Onward and Upward!
P.S. We’ve heard a few people asking about another fork, Bitcoin Gold (BTG). We’ve done a technical evaluation of Bitcoin Gold and determined that it is still early in its software development phase. There is technically no way we could support Bitcoin Gold at this point, even if we wanted to. If Bitcoin Gold ever becomes a viable cryptocurrency, we might consider offering Bitcoin Gold withdrawal capabilities, similar to what we’ve done for Bitcoin Cash (BCH) and Ethereum Classic (ETC).