IG notifies clients of measures regarding next Bitcoin fork
IG warns its clients it will stop accepting client orders to open new short positions from November 8, 2017 until after the fork which may lead to the creation of bitcoin2x.
Electronic trading major IG Group Holdings plc (LON:IGG) has responded to client questions about how it would respond to the coming Bitcoin fork.
The company notes that there have been two hard forks in the Bitcoin blockchain so far this year, and there is likely another one in store. This next fork could result in the creation of another new cryptocurrency: bitcoin2x (B2x). Bitcoin2x will activate the second part of the ‘Segregated Witness’ protocol which would lead to an increase in the block size from 1MB to 2MB.
At the moment, there is no consensus within the Bitcoin community over a clear winner in the SegWit2x hard fork. This is a situation similar to the one we witnessed in August this year. The possibility therefore remains that both blockchains and currencies will coexist, or that bitcoin2x will be accepted by the majority and renamed ‘bitcoin’, IG says.
The fork is set to take place once block #494,784 is mined, predicted to be on November 16, 2017, although this date is not firm.
IG notifies its clients that all trading on bitcoin will likely be suspended for a significant period before and after the fork. The company will also stop accepting client orders to open new short positions from November 8, 2017 until after the fork.
IG bases the price of the cryptocurrency products it offers on the underlying market, made available to it by the exchanges and market-makers with which it trades. In the event of a hard fork – IG will generally follow the blockchain that has the majority consensus of cryptocurrency users, and will therefore use this as the basis for its prices. The company reserves the right to determine which blockchain and cryptocurrency unit have the majority consensus behind them.
If the hard fork results in a viable second cryptocurrency, IG may create an equivalent position on client accounts to reflect this. However this action is at its corporate discretion. If, within a reasonable timeframe, the second currency does not become tradeable on major exchanges or is otherwise deemed not to be viable as a currency (for example, it is not mined), IG may delete any positions that had previously been created at no value on client accounts.
