The upcoming Bitcoin Cash hard fork on August 1st has excited many and worried others. It is going to be a disruptive time for the Bitcoin network and cast uncertainty over the future of Bitcoin. Will one chain survive? Will both live on and compete forever? Those answers are hard to predict from our vantage point.
While some companies have chosen to back Bitcoin Cash, others have expressed less faith in the new altcoin. Coinbase is one company that has no plans to support Bitcoin Cash, and that has been causing some problems even before the fork.
Coinbase Is Making You Wait for Your Coins
I and others at the Merkle have stated multiple times that anyone who owns Bitcoin — or any altcoin for that matter — should store their coins in a way in which they have full control of private keys, and thus full control of their funds. Still, many choose to store some or all of their funds on exchanges and services such as Coinbase for convenience.
However, that convenience is being strained of late. Coinbase recently sent out an email to all its customers explaining that they had no intention of supporting Bitcoin Cash after the fork and that anyone wishing to receive access to those tokens should transfer their funds to a wallet or service which will support it.
The exchange gave a deadline for when funds would have to be moved to a new wallet to ensure access to Bitcoin Cash tokens, which was right before the fork itself. This has caused issues for both users and Coinbase itself. Since even the most outspoken critic of Bitcoin Cash would not dare miss an opportunity to sell any tokens in their possession, pretty much everyone has been trying to get their coins in a place where they can either sell or hold both chains. Coinbase broadcasted that place was not with them, and users responded by withdrawing entire balances.
Coinbase has decided to institute a temporary waiting period for users withdrawing coins. This is likely to make sure that the exchange has the funds available for withdrawal, and to control the flow of money leaving the company.
While I can respect Coinbase’s business decision, some users are reporting that some of these waiting times can be up to 30 hours. One redditor commented in a thread that it had been over three days since he or she had requested their coins but the transaction was “still pending.” This strikes me as being one of the easiest ways to lose customers. That kind of bad user experience will keep users from returning to Coinbase in the future after the fork.
There is a silver lining in all of this for these users, in my opinion. This is a perfect example of why it is so important to be in control of one’s own private keys. While I do believe that Coinbase is a legitimate company and it never had any intention of pulling a Mt.Gox or other bank run, its users have been left in unsatisfactory situations. If your coins are yours, you should be able to transfer them and do whatever you like with them when you would like to do so. Exchanges like Coinbase provide invaluable services to the cryptocurrency community, but storage should not be one of them. For better storage options, check out our wallet reviews and suggestions.