GDAX Announces Contingency Plans for Bitcoin Soft Fork

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The GDAX digital currency exchange has announced its plans for addressing the anticipated implementation of the BIP 148 User Activated Soft Fork, or UASF, on August 1st. In a blog post published on Thursday, GDAX general manager Adam White explained why the exchange may be forced to temporarily halt all trading and withdrawals to protect its customer’s funds.

The UASF is designed to force activation of Segregated Witness (SegWit). The proposal has been the subject of a great deal of controversy since it was first announced, with many favoring an alternative scaling solution known as Segwit2X. Despite that controversy, BIP 148 is scheduled to go into effect at the beginning of August.

In his post, White explained that UASF could result in the creation of two separate Bitcoin blockchains. He also acknowledged the uncertainty that such a split would create for the Bitcoin community:

“Should this occur, there are two likely outcomes:

1. One blockchain becomes dominant, resulting in the other blockchain having low community adoption and value.
2. Both blockchains are adopted, co-existing and operating independently of one another with roughly equal community adoption and value.”

According to White, GDAX has a contingency plan in place to ensure that a fork doesn’t adversely impact its customers. That plan apparently involves suspension of Bitcoin activity on the exchange during any period of uncertainty that results from the soft fork activation.

“In either scenario we will implement safeguards to ensure the safety of our customers’ funds. For example, we will temporarily suspend the deposit and withdrawal of bitcoin on GDAX and may pause the trading of bitcoin as well. This decision will be based on our assessment of the technical risks posed by the fork, such as replay attacks and other factors that could create network instability.”

The views expressed by the authors on this site do not necessarily represent the views of DCEBrief or the management team.

Author: Ken Chase

Freelance writer whose interests include topics ranging from technology and finance to politics, fitness, and all things canine. Aspiring polymath, semi-professional skeptic, and passionate advocate for the judicious use of the Oxford comma.

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