Nov 06

Preparing for Segwit2x hard fork (cancelled)

Update November 8th: Segwit2X is cancelled

Segwit2x, the second part of the New York Agreement will go live on block 494784 (roughly around November 16).

The first part (mandatory Segwit activation on the network on the 1st of August) didn’t directly create a split on Bitcoin network as ecosystem actors that didn’t support it moved to Bitcoin Cash. The second part (forking Bitcoin consensus code to bump the maximum block size limit to 2 Mb) is more controversial and will likely split the Bitcoin network.

As for the previous Bitcoin Cash fork, we’ll let our users trade on both chains and split coins easily, even if the ride might be slightly more bumpy due to the fact that Segwit2x was not initially designed to cause a split.

The safest course of action if you hold any bitcoins is still to avoid transacting during the event and wait for the dust to settle.

For the sake of clarity and as different actors might name a different chain “Bitcoin” during the fork and some time after, we’ll call in this article the current Bitcoin chain Bitcoin-1x and the potential Segwit2x chain Bitcoin-2x.

Actions to take for all users

It’s recommended for all users to update your Ledger Nano, Nano S or Blue to the latest firmware as a new application will be used to split your coins and handle transactions on the Bitcoin-2x chain.

Actions to take if you hold any bitcoins

If you potentially value both Bitcoin-1x and Bitcoin-2x, or if you are unsure about it, or if you do not understand anything about what’s going on, it’s recommended to avoid transacting while the fork is ongoing, wait for the dust to settle, assess which chain(s) is/are viable after the event, and wait for further instructions.

If you do not care at all about Bitcoin-2x then you can completely ignore the fork event, nothing on your side is necessary. No need so split your coins.

If you do not care at all about Bitcoin-1x, you can switch on the Bitcoin-2x chain once it is viable and ignore completely Bitcoin-1x.  No need to split your coins.

Actions to take if you value both Bitcoin-1x and Bitcoin-2x

If you plan to transact on the Bitcoin-1x and/or the Bitcoin-2x chain (and valuing both chains independantly) it is necessary to split your coins to avoid transaction replay, which would spend your assets on both chains simultaneously.

Ledger Wallet Chrome application will be updated to display a warning if a transaction you create is vulnerable to replay, and invite you to split your coins in that case. You’ll be able to bypass this warning if you wish to actually transact on both chains, or care only about a single chain.

It’s recommended to avoid using third party wallets supporting Ledger products to transact during the fork if they do not support splitting coins between both chains, or do not follow the chain you’re supporting.

Preliminary coin splitting process description

We’ll offer a non custodian and a “half custodian” process to split your coins.

The non custodian process will rely on the software created by the chainspl.it initiative (https://github.com/chainsplit) and offer a command line or web interface to use it with Ledger Nano, Nano S or Blue. It’ll be non automated and recommended for advanced users only.

The “half custodian” process will involve a new Ledger application created for the Nano S and Blue (it will not be available on Ledger Nano) and will be fully automated. We’ll make available tainted inputs to our users with a contract enforced by the new application that sends back those tainted inputs to us — this is possible because our secure applications distribution architecture allows to securely share a set of keys with our users without revealing it. In other words, our splitting app will take care of everything automatically and with the highest levels of security.