To cope with the upcoming software update for bitcoin, India exchanges plan to stop oprations around Ausgust 1, to safeguard their users.
Indian bitcoin exchanges are likely to stop operations for some time during the period around August 1, citing concerns revolving around bitcoin’s software update.
Unocoin plans to suspend its services for about 72 hours until it gets more clarity post the network update, Sathvik Vishwanath, Co-Founder and CEO, Unocoin told Moneycontrol.
“Bitxoxo is ready to upgrade their technology and security measures of their interface if any of the scaling proposals get active. And if SegWit get active, Bitxoxo may suspend all operations for 2-7 days for upgrading technology and enhancing security,” Hesham Rehman, co-founder and CEO of the company, said.
Sandeep Goenka, co-founder of Zebpay, said that though a hard fork is highly unlikely but to ensure whether the bitcoin network is working properly post the update, the company might stop transactions over their platform for some time.
Growing interest in Bitcoin as a rational payment system online has created a surge in number of bitcoin transactions happening worldwide. As a result, it is getting harder to fit these into the 1MB blocks that gets created every 10 minutes, Sathvik Vishwanath said.
“The next logical thing is for bitcoin to scale up — among many proposals is SegWit, which has seen clear majority and will be attempted on 1st of August. It is likely to be successful,” Vishwanath added. “The exact side effects if things do not go as per the plan are still unknown.”
In simple words, various solutions have been suggested and the crypto-community has been at loggerheads to decide on one. For certain software updates to happen on bitcoin, there needs to be a consensus among miners (by hash power) to implement it.
If miners don’t reach a consensus by August 1, there will be a hard fork, which will split blockchain, leading to the formation of two currencies.
What could happen if there is hard folk?
In such an event, users are at risk of losing their bitcoins. To stop this from happening exchanges around the world plan to stay put for a few days.
“There are few suggestions that can help ensure security to users. One is that we advise users to avoid making any sort of transaction dated nearby 1st August 2017. Also, they should keep control on their private key, which is a must. Secondly, whatever the consensus might be, until the final decision on scaling we advise users to store their bitcoins in wallets where they can get control on their private key,” Hesham Rehman said.
Also, there is a chance that bitcoin price might drop post the settlement on scaling.
“To cope with the price volatility, users can convert their bitcoin in some other crypto currency for the time being,” he added.
In the unlikely event of a hard fork, Zebpay is prepared to comply with the new network and will provide both — legacy bitcoin and hard forked bitcoin — to its users, Goenka said.