Coin follows JCBA guidelines to respond to possible Bitcoin crisis on August 1st

Maria Nikolova

Members of Japan Cryptocurrency Business Association, including Coin, are about to halt bitcoin deposits/withdrawals, as the outcome of the User Activated Soft Fork is unknown.

The world of cryptocurrencies is becoming increasingly nervous ahead of August 1, 2017, when a User Activated Soft Fork (UASF) may actually lead to a split, or branching of Bitcoin into two separate blockchains. Coin, the cryptocurrency exchange business of GMO Internet Inc. (TYO:9449), is getting ready for any possible outcome of Bitcoin Improvement Proposal (BIP) 148. The company is about to halt bitcoin deposits and withdrawals at the end of the business day (Japanese time) on July 31, 2017. The resumption date is not yet known, although the company expects that the transactions may resume as early as August 4, 2017.

In implementing these measures, Coin follows the guidelines of Japan Cryptocurrency Business Association, of which it is a member.

Under BIP148, Bitcoin will go through a user activated soft fork on August 1, 2017. A soft fork is a BIP change where some previously valid blocks are made invalid, whereas others remain valid. This fork requires a majority of miners to upgrade so that the new rules are enforced. On August 1, 2017, as per the UASF, clients that have activated the soft fork will only accept blocks mined from miners that have also upgraded to start signaling for the soft fork, and will reject blocks that were created from miners that have not upgraded.

Will there be some confrontation? Most likely, yes. The result will hinge on the support that the two sides receive from miners.

If BIP148 succeeds with a large support or fails with a little support, then the Bitcoin world will likely continue to operate normally. The “crisis” scenario is if neither side is the obvious winner. This means that the blockchain will split, that is, two versions of the blockchain will emerge. All coins that existed before this split will continue to exist on both chains. This indefinite state may continue for months, according to some forecasts.

This lack of clarity has led many to dub August 1, 2017, as the “black swan” or “grey swan”, for the cryptocurrency world. Here is a very interesting article on the topic.

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