Could the Loss of BitGo Support Be Harsh for BSV?
Founded in 2013, BitGo are one of the oldest cryptocurrency wallet providers that maintained popularity. They currently provide wallet solutions for exchanges and asset managers today as opposed to private clients. Many large exchanges such as Bitfinex have used their services.
BitGo have added support for over 200 different cryptocurrency assets throughout the years. This includes recent support for Stellar Lumens. Recently BitGo have released an announcement that surprised many. They will no longer support BitcoinSV (BSV) after February 4th.
BitGo & BitcoinSV
BSV is due to undefrgo a hardfork code named "Genesis" on February the 4th 2020. This hardfork is meant to improve scalability by removing the block size cap and a few other improvements. As with nearly any hardfork, there is a slim possibility that BSV could split into 2 separate chains. This is highly unlikely, however.
It appears that BSV's hard fork is the reason why BitGo will no longer support BSV. As per their official blog post:
"This consensus rule change will make Pay-to-Script-Hash (P2SH) outputs invalid. Since BitGo's BSV wallets use P2SH-based multi-signature addresses, the protocol change will render BitGo BSV wallets unable to receive funds."
Following February 4th, clients with BitGo wallets will no longer be able to receive funds. Funds being sent to BitGo wallets will return to the senders.
BitGo have warned clients to take action before the scheduled hard fork in February 2020. They recommend two different courses of action: Move your BSV holdings elsewhere, or convert them to BTC.
Following that date, BitGo wallets with BSV holdings will have most of their functionalities removed.
Possible BSV Fallout
Seeing that many exchanges use BitGo's hot & cold wallets, this could spell some bad things for Bitcoin SV. We could possibly see exchanges delist BSV following BitGo's decision, while some may just use a different wallet provider. Hypothetically the Genesis hard fork could cause a plethora of issues for anyone used to using P2SH-based multi-signature addresses wallets.
This in addition to Craig Wright's legal battle in Florida makes things seem a bit bleak for BSV in the short term. That is unless a "bounded courier" does appear on the 1st of January and gives Wright the full keys to the "Tulip trust". That does seem a bit far fetched at this moment however as court documents reveal even Judge Reinhardt seems to doubt its existence.
Calvin Ayre Responds!
It didn't take long for the Founder of CoinGeek and BSV personality, Calvin Ayre to respond. He tweeted a few hours after BitGo's announcement claiming:
"Bitgo came to me and wanted 15 M US to support the fork. I told them to go fuck themselve and am instead investing in a couple major competitors as if they do not offer BSV they are going to die."
We have reached out to Calvin Ayre via email for clarification on his tweet yet have received no response.
His tweet raises quite a few questions, however. Is there any proof that BitGo demanded a $15 million payment to support BSV's fork? Which company or companies is Ayre considering investing in and how will the BitGo/BSV dispute affect the cryptocurrency?
One can suppose that all these things will be revealed in due time.
Written by Jonathan Ganor
Writer & cryptocurrency aficionado