BCH: Did I throw away $$$$? Perhaps…

Yesterday was D-Day in the Bitcoin world: On Tuesday, Aug 1st 2017, Bitcoin Cash (BCH) forked off of Bitcoin (BTC). For anyone with control over their wallet and private keys, they now have an equal amount of BTC and BCH.

I have a Bitcoin wallet. Yet, I don’t have any new Bitcoin Cash—and I have no one to blame but myself. Will I ever get the BCH associated with my pre-fork coins? I think that it is likely, though certainly not assured. If not, it will still be my fault. After all, I had fair warning from the company that I trust as custodian of my assets.

A Cryptocurrency Mantra:
“Woe be the person who trusts decentralized cash to a custodian”

I trust Coinbase for good reason. I left my BTC in my Coinbase wallet and vault throughout the fork. Let me tell you how I view the risks of failing to remove my coins before August 1…

  1. Coinbase was clear in warning that BTC withdrawals would be frozen before and after a fork. No problem…I had no immediate need to access my coins.

2. Coinbase warned they had no plan to support BCH—not even for withdrawal after a fork.

I accepted this 2nd warning, even though their reasoning and motives were terribly weak. But, today, I feel very sore. I need a morning after pill! Bitcoin still trades at the level of the past week—about $2700 US/BTC. But my non-existent BCH holdings have significant value! It was briefly as high as $750 per coin, and is now trading at $475. This means that even if I have no desire to save or spend the new coin, I no longer have the option to liquidate my forked asset. I lost a slam-dunk opportunity to capture 17½%.

We’re not talking about a theoretical gain or a gain that assumes liquidation at a momentary spike. We’re talking about right now—a missed opportunity to pocket thousands of dollars!

Am I angry? Not really. I am disappointed in my lack of initiative, but I have only myself to blame. For the record, I don’t believe that I have a reasonable legal claim against Coinbase. After all, they warned me! But, I hope that they will give me my forked coins—eventually. They have already acknowledged to conspiracy theorists that they will not keep the forked BCH, in the event that they create a conversion mechanism. In that case, they will allow withdrawal by the owner of the associated BTC. Now that they see dramatic fractional value, how could they not complete the fork?!

Where Does This Leave Me?

I’m not poorer today than I was yesterday, and I am surprised to find that I have not lost value in original Bitcoin. But, I missed a zero-risk opportunity to gain 17½% overnight. It was staring me in the face and I passed it up. At least I draw comfort in my confidence that Coinbase will complete the fork. Please, Coinbase: Complete the fork!


Ellery Davies co-chairs Crypsa & Bitcoin Event, columnist & board member at Lifeboat, editor
at WildDuck and will deliver the keynote address at Digital Currency Summit in Johannesburg.

2 thoughts on “BCH: Did I throw away $$$$? Perhaps…

  1. Coinbase sent me an email. The most important points:

    1. “Customers with balances of bitcoin at the time of the fork now have an equal quantity of bitcoin cash stored by Coinbase.”
    2. “We are planning to have support for bitcoin cash by January 1, 2018, assuming no additional risks emerge during that time.”
    3. “Once supported, customers will be able to withdraw bitcoin cash. We’ll make a determination at a later date about adding trading support. In the meantime, customer bitcoin cash will remain safely stored on Coinbase.”
  2. That’s terrific news, Itzehel. I learned it from your comment—even before I saw the Coinbase announcement.

    I was also pleased to read that Coinbase CEO, Brian Armstrong may have been influenced by my article, which was syndicated beyond this humble Blog.

    Here is the full announcement by David Farmer, Director of Communications at Coinbase:
    _____________

    Update on Bitcoin Cash

    We wanted to give our customers an update on the recent Bitcoin hard fork. You can read more about what a digital currency fork is here.

    Forks enable innovation and improvements to digital currency and we believe that we will see an increasing number of forks in the future. We expect this to be a vibrant and innovative community.

    When a digital currency forks, it creates a new digital asset. Adding new digital assets to Coinbase must be approached with caution. Not every asset is immediately safe to add to Coinbase from a technical stability, security, or compliance point of view.

    Our top priority is the safety of customer funds and we spend extensive time designing, building, testing and auditing our systems to ensure that the digital assets we support remain safe and secure. We may not always be first in adding an asset, but if we do, you can be sure that we’ve invested significant time and care into supporting it securely. We believe this is the best approach for us to maintain customer trust.

    In the case of bitcoin cash, we made clear to our customers that we did not feel we could safely support it on the day it was launched. For customers who wanted immediate access to their bitcoin cash, we advised them to withdraw their bitcoin from the Coinbase platform. However, there are several points we want to make clear for our customers:

    Both bitcoin and bitcoin cash remain safely stored on Coinbase.
    Customers with balances of bitcoin at the time of the fork now have an equal quantity of bitcoin cash stored by Coinbase.

    We operate by the general principle that our customers should benefit to the greatest extent possible from hard forks or other unexpected events.

    Over the last several days, we’ve examined all of the relevant issues and have decided to work on adding support for bitcoin cash for Coinbase customers. We made this decision based on factors such as the security of the network, customer demand, trading volumes, and regulatory considerations.

    We are planning to have support for bitcoin cash by January 1, 2018, assuming no additional risks emerge during that time.

    Once supported, customers will be able to withdraw bitcoin cash. We’ll make a determination at a later date about adding trading support. In the meantime, customer bitcoin cash will remain safely stored on Coinbase.

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