What Happens If Bitcoin Unlimited Splits After Bitcoin ETF Approval?

The call to raise a bounty for the development of a code that would enable a safe User-Activated Soft Fork (UASF) has raised the issue of a likely lapse in the exchange traded fund arrangement.

Following news that Antpool mined a Bitcoin Unlimited block and several how-to-manage double Bitcoin wallets tutorials burst online, some Bitcoin users have joined the call to raise a bounty that was initiated by Samson Mow, an entrepreneur who has committed to offering one Bitcoin for the bounty.

Damage control

The call is to foster the deployment of a safe UASF to “control the damage BU will do to the Bitcoin economy.”

Several others have since joined the call with the offer to commit financially. So far on Mow’s page, about six Bitcoins have been raised as at the time of this writing. This amount is still below the amount a known voice in the Bitcoin Unlimited camp stated his team would offer to “control the damage” UASF will do to exchanges.

Earlier, Jihan Wu had offered a 10 Bitcoin bounty for whoever produces a guiding document for exchanges in the event of a split, which he had stated will occur if UASF is implemented. His tweet says the Blockchain is likely to split and create two or three kinds of Bitcoin if the majority of miners vote against the activation of SegWit.

There are suggestions that Coinbase/GDAX and Bitfinex will list the BU chain as a new altcoin in the event of a chain fork.

It is worth noting that although the two sides are expressing different views, this does not necessarily mean one is right while the other is wrong but rather that it is a representation of the shared views by sections of a large group.

What is also clear is the understanding that Bitcoin momentum is growing and the network effect it is presently creating will be a great opportunity for its advancement.

ETF’s possible lapse

While Bitcoin Core’s Peter Todd warns that it is not clear yet how safe UASFs actually are or the best way to deploy them, with some suggesting that the bounty raised could be used to push research and development forward in that regard, the question of what happens to an approved ETF in the event of a split in Bitcoin surfaced.

This is a key lapse in the ETF arrangement that hasn’t been fully discussed and factored into the filing request. Many in the Bitcoin ecosystem have been anticipating the approval of the first Bitcoin ETF this weekend, but as others in the community have raised, the ongoing block size saga with a possibility of a split could be a cog in its wheel. Day traders/speculators would have had a field day if a situation like this had happened with an ETF in operation. Todd added that the ETF hasn't hired competent Bitcoin experts to evaluate their plans.

Meanwhile, the unfolding situation continues to be a testament of what Bitcoin was created to withstand - contention and disagreement.

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