People who have been following the Ethereum situation may have noticed the community has voted for hard forking the code. While this should solve the issues about The DAO, it is also a security risk for any platforms dealing with ETH trading. Kraken has announced they will halt all deposits and withdrawals before and after the hard fork goes into effect.
Ethereum Hard Fork Is Happening Soon
For quite some time, there has been a substantial debate on whether or not Ethereum should be hard forked. Ever since The DAO saw its funds being sluiced to a different account, the team proposed such a drastic change to recover funds. Although some people may still disagree with this option, the votes have been tallied. Like it or not, the Ethereum hard fork will be occurring shortly.
Exchange platforms need to take ample precautions during this precarious moment in Ethereum history. A hard fork could result in some transactions being deemed invalid, with coins on a “forked blockchain” being invalid. Any exchange obtaining this funds would face financial losses, which needs to be avoided above all else.
Kraken, one of the leading Ethereum exchanges, issued the following statement:
“ETH deposits and withdrawals will be disabled approximately 1 hour before the hard fork activates. Trading will continue as normal during the fork. All ETH on Kraken after the fork will be tokens of the winning chain (i.e. the chain with the most work on it). ETH deposits and withdrawals will be enabled again once the winning chain has become clearly evident. We expect the hard fork process to be smooth and quick, but there is no certainty of this.”
The one-hour windows should give Kraken ample time to ensure all funds are safe and sound. The community seems to have taken a liking to this idea as well, as funds security is in everybody’s best interest. Moreover, Kraken will not halt trading of funds already on the exchange, which is a smart move.
Some people may be wondering if it would be better to halt trading as well, but that should not be necessary. Exchange trading on most platforms is done off-chain, and it will have no impact on the outcome of the hard fork or vice versa. It will be interesting to see how this hard fork will affect the Ethereum price, though.
Image credit 1
If you liked this article follow us on Twitter @themerklenews and make sure to subscribe to our newsletter to receive the latest bitcoin and altcoin price analysis and the latest cryptocurrency news.
