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[Update] Possible disruption Bitcoin network
Update : We no longer deem it necessary to pause deposits and withdrawals, as the risk of a split in the Bitcoin network has
significantly decreased in recent developments. It is possible that the situation will change, forcing us to revert
this decision. We will immediately inform you if this is the case, but for now we see no reason to pause activities.
August 1st will be an important day in Bitcoin’s history, as it will become clear whether the Bitcoin network will split into multiple different versions. This update is intended to describe the possible consequences for BL3P users and how BL3P will handle all possible scenarios.
In short: a group of Bitcoin users will force the activation of “SegWit”, which enables several upgrades to Bitcoin, on the Bitcoin network through a so-called user-activated-soft-fork (UASF). Miners that do not run software to support this change will be on a separate version of the Bitcoin blockchain, causing all bitcoins in circulation to be duplicated.
These are some of the dates to watch:
July 21st: Miners that signed the “New York Agreement” will start signalling SegWit. If more than 80% of the total hashrate signals in favour of SegWit, it can be activated through another 80% majority vote.
July 29th: This is the deadline for SegWit activation. It will become clear whether the network split on August 1st can be prevented. The measures BL3P will take can be updated at any time on this day and will be communicated on the fly.
August 1st: At 2:00 AM Amsterdam time (CEST) all UASF (BIP148) nodes will start ignoring all non-SegWit blocks. It will become clear whether the network will split in the following hours.
What does this mean for the availability of BL3P and the bitcoins that are stored with BL3P?
In all likelihood BL3P will temporarily halt deposits and withdrawals of bitcoin on July 31st as there will be uncertainty whether transactions after August 1st will be final or reversible. The risk of deposits and withdrawals being reversed is something that we want to avoid, as it can lead to negative effects for both BL3P and its users. It could potentially take several hours and even days before deposits and withdrawals are re-enabled.
It is possible the price will fluctuate heavily as a result of the uncertain situation on the Bitcoin network. Your bitcoins can significantly increase and decrease in value.
As “market makers” and “trading bots” will likely stop operating, the order book can be thin, increasing the risk of volatility. We recommend against using market orders during this time.
It is possible that BL3P will need to temporarily pause trading as a result of the unpredictable sitaution on the Bitcoin network.
In the event of a chain split, BL3P will not immediately split its bitcoin-euro market. This means that you will initially have a single bitcoin balance that can represent multiple bitcoin versions at the same time.
As the situation develops and it becomes clear which version(s) of Bitcoin are being supported, BL3P can decide to split the market on its platform. This will result in all open orders being cancelled and your bitcoin balance to be duplicated for the new version of Bitcoin. A new market will be added where you will be able to trade this new version for euros.
When considered safe we will re-enable deposits and withdrawals. This depends on whether we are able to implement the necessary precautions to provide protection against “replay attacks” (bitcoin transactions that are copied to the other versions of the network).
Versions of Bitcoin that show minimal support from the community will not be available on BL3P. Deposits for these versions will not be credited and withdrawals will not be available. If an alternative version does grow to a larger market share and wider community support BL3P will re-evaluate its decision.
What should you do moving forward?
If you do not require access to your bitcoins in the coming weeks, you can leave your bitcoins (securely) on BL3P and wait out the developments. Note that you might not be able to access any value alternative versions of Bitcoin represent on other markets.
Never invest more than you can afford to lose. It is always possible that the price will drop significantly. The current situation increases the risk of this happening. Note that early activation of SegWit and no chain split is likely to have a positive effect on the price.
You can choose to take your bitcoins into your own wallet by withdrawing them before 6:00 PM on July 31st. You will not dependent on our platform for access to your bitcoins on each version. However, it can be technically challenging to access your bitcoins on the alternative versions of the Bitcoin blockchain.