Earlier this year, we expressed our support for SegWit and UASF – two Bitcoin scaling solutions. As many of you may be aware of, currently, Bitcoin’s scaling debate is at a crucial phase. Upgrades to the Bitcoin network will be implemented shortly, hopefully ensuring the network’s proper functionality in the long term.
The information below is therefore highly relevant to CoinGate Merchants and Traders. Please read on to understand what will be happening with Bitcoin and our services during the upcoming days.
At this particular moment, it seems that a permanent Bitcoin network split is unlikely. None of our Traders and Merchants should therefore be alarmed and suspend their activities / operations / sales.
In case the Bitcoin’s Blockchain splits (i.e. a hard fork occurs), CoinGate service for buying and selling Bitcoin will most likely be shut off for several days to avoid any issues with payment settlement.
The service will be re-introduced once the turmoil calms down and our team feels that a degree of stability of the Bitcoin network(s) is sufficient to provide our customers with a quality service once again.
We are constantly monitoring the situation and will do everything in our power to minimize the disruption of our merchant payment processing services whether a hard fork occurs or not.
Our team has devised several contingencies in preparation for the potential network split. Below is a list of possible measures alongside their respective likelihoods that we might implement to our Merchant payment processing engine.
(none of the measures in this list will be implemented for sure, they might or might not be, depending on Bitcoin network conditions)
- A period of longer confirmation times (very likely), i.e. we will wait for several Bitcoin network confirmations (most likely 6, but might be up to 30) for all merchant payments. This period might happen at any time from July 21 to August 4, and might last from several hours to several days. This measure, if implemented, will help us tackle the high risk of increased orphaned block rates (an orphan is a block which belongs to a “losing” branch in a temporary blockchain split).
- Temporary suspension of payouts / withdrawals (average likelihood). This might last from 24 to 72 hours. Payouts / withdrawals will only be suspended if the network splits.
- Complete suspension of payment processing service (unlikely; a last resort if things go bad). This period might last 1 to 12 hours. In case this happens, the customers will see a message on the invoice explaining the situation, whereas the QR code, amount, address, etc will not be shown. Payments made before the suspension happened, will not be lost, but might be delayed significantly.
After the Bitcoin Scaling Upgrades
In case of a permanent split, we might choose to support one, or both, of the branches. In any case, CoinGate will do everything in our power to protect our Traders, Merchants, and their customers.
Even if we eventually choose to support only one branch, we will still receive the transactions on another branch as well, and so we will be able to refund any transaction sent to us. This means that if you are accepting Bitcoin payments via CoinGate, your customers will not be facing any risk of “losing” their bitcoins (whichever branch they belonged to) if they send them to CoinGate invoice addresses.
We will keep all our users informed of any ongoing developments related to Bitcoin scaling by continuously updating this post.
The CoinGate Team