Bitcoin: Unique By Design
Bitcoin’s unique design facilitates continuous live upgrades to its protocol. As a technical achievement, its existence pushes the boundary of computer science.
When new code is developed, Bitcoin’s community will rally together to discuss and share thoughts. Stakeholders from every spectrum of the industry will chime in to voice their opinions. Some of these views will be conflicting. This can be observed with holders, developers and miners each maintaining bias towards differing vested interests. The complexity of Bitcoin extends to far beyond just code. It questions theoretical concepts posed by economists, computer scientists and cryptographers. Beyond the discussion, we are seeing real world economic effects play out in the digital theatre of Bitcoin.
The rising popularity of Bitcoin over recent years has amounted to an increase in transactions across its network. On top of this, industry areas outside of finance are also using Bitcoin’s blockchain to store other digital assets. With a greater combined flow of traffic through the network, the issue of capacity and scaling has been much debated in recent times.
Today there is a consensus that there is an undeniable need to scale the network in order for Bitcoin to grow. Two main groups of developers with different ideals, theories and interests are pushing to upgrade Bitcoin’s code for the greater good. In one camp we have Bitcoin Core, and in another we have Bitcoin Unlimited. Both groups are working towards progressing a technology that is becoming ever more powerful. Their efforts will enable Bitcoin to mature and thrive in ways unmatched by any technology for years to come. This is an inevitability.
The Bitcoin Fork
In software engineering, a fork describes what occurs when a developer takes a copy of a project’s code and independently develops improvements. This is common practise for coders and developers and Bitcoin’s open source nature encourages this. Read more about project forks here.
In the short term, this poses a challenge that the industry needs to adapt to; potential for a hard-fork to occur.
A hard-fork will result in the existence of two versions of Bitcoin’s blockchain. Both chains will be valid in the eyes of their respective users. Both chains will retain economic and monetary value.
Magnr’s hard-fork plan
Magnr will support a continuous service across Trading and Savings during a fork. On Magnr Trading, the BTCUSD pair is offered on partnered exchanges. Trading will continue as normal during a fork as long as the exchange selected continues to accept trades. We expect volatility to be high during this period. A period of price discovery will follow as the two assets find a new market price.
Following announcements from our partnered exchanges and wallet service providers, we expect the most continuous service to be on the Bitcoin Core’s chain.
For clients wishing to trade during this period, please ensure that your account is funded in advance to minimise the impact of technical uncertainties a fork may cause.
Immediately after a fork – Magnr will act to preserve the value of client deposits on both blockchains. A fork will immediately trigger a pause on all withdrawals for a minimum period of 3 working days. This is to enable us to protect our business and more importantly our client funds from known exploits, such as replay attacks and other unpredicted exploits. Our team will continually monitor the situation as it plays out, and will keep clients up to date with news about the expected return to normal service.
Following a fork – Magnr does not intend to support two separate Bitcoin blockchains. Instead we will favour the blockchain that holds the greatest value by market capitalisation. We will use this metric to determine which chain to continue building our business around. We expect this to be the chain which maintains the highest level of Tier 1 liquidity in the period following the fork.
The majority of Magnr clients use Bitcoin as an investment seeking to pursue the highest financial return possible. It is our pledge to maintain as much asset value as possible on behalf of Magnr’s clients.
Regardless of which chain prevails. We wish to acknowledge every actor involved and the continuous push for the ideals and values they believe in. This is a new chapter in the story of Bitcoin.