GDAX to suspend bitcoin transactions on August 1 if bitcoin soft fork activates

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GDAX has said that it will temporarily suspend bitcoin transactions on August 1 if a soft fork is activated on August 1.

GDAX is reffering to the August 1 deadline for the BIP148 User Activated Soft Fork (UASF), because of which tensions are high and prices of bitcoin and other cyrptocurrencies have already started declining rapidly in anticipation of a major market disruption.

The soft fork on August 1 may result in the creation of two blockchains, with one that supports BIP148 and another that doesn’t. This begs the question: What will major crypto exchanges do in the case of a soft fork?

GDAX buckles up for a chain split

In a blog post on July 13, GDAX announced that will be temporarily suspending Bitcoin transactions in order to protect customer funds should a soft fork occur. GDAX is the crypto trading platform owned by Coinbase, which is currently the world’s largest Bitcoin exchange.

GDAX General Manager Adam White said they will be implementing safeguards to ensure safety of its customers’ funds. These safeguards will not be limited to temporary suspension on deposit and withdrawal of bitcoin on GDAX and a temporary suspension of trading 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.

Two minutes to midnight

The UASF is designed to force activation of Segregated Witness (SegWit), which would increase the block size limit on the blockchain by removing signature data from Bitcoin transactions. BIP148 has been met with a great deal of controversy, with many nodes signaling support for an alternative scaling solution known as SegWit2x.

SegWit2x is a scaling solution which combines the activation of Segregated Witness with a 2mb blocksize increase. Segwit2x requires 80{7b1a8a58d3ffe2d8e535e80e794d8bc0bf06a3ecc0c2050b83ca37784c6fddca} of network hash power to signal support for it. It achieved that support at the beginning of the month when signaling for SegWit2x skyrocketed to around 88{7b1a8a58d3ffe2d8e535e80e794d8bc0bf06a3ecc0c2050b83ca37784c6fddca}.

However, current signaling for SegWit2x only indicates the intention to support it. Actual signaling for SegWit2x will begin on July 21, a little over a week before the August 1 deadline.

Because miners who promised to activate SegWit2x may fail to do so on  July 21, many others are still signaling support of BIP148. Should miners fail to follow-through, a chain split on August 1 remains likely.

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