Circle acquired Poloniex to provide improved customer experience

On 26th February, Goldman Sachs backed payment processing platform, Circle, acquired Poloniex in a deal valued at $400mm. This means big steps for both Poloniex and Circle. Poloniex is a cryptocurrency exchange based out of Delaware in the United States that offers trading, margin trading and lending for over 100 different cryptocurrencies. The company was started just four years ago in 2014. The exchange currently pushes over 9000 BTC in volume per 24 hours, making it a relatively sizable exchange. The acquisition of Poloniex by Circle is a jump in the right direction for Poloniex and its users. Users can expect a better trading platform in conjunction to an improved customer support basis. This acquisition is imperative in the transition of cryptocurrencies into mainstream finance. A prestigious such as Goldman Sachs supporting this deal will surely attract the attention of many major financial influencers.

As for Circle, the company has created a platform similar to venmo except with an even more social media oriented user interface. Clients are able to pay one another using a messaging platform similar to iMessage. This might seem like a bit of a disjoint union between Circle and Poloniex; however, there exists a huge potential in integrating the two platforms. For example, Circle can allow for payments using any cryptocurrency from one user to the next using Poloniex’s servers. Furthermore, the acquisition brings about the potential for Circle to automatically exchange tokens, or any cryptocurrency for that matter, into Bitcoin, Ethereum or even fiat (via USDT) seamlessly and quickly. If this were to occur, Circle would become a primary competitor to Coinbase’s Toshi mobile app that already allows for messaging and transfer of Ethereum and Ethereum based tokens. Circle is now capable of offering just that and more with the ability for any Poloniex cryptocurrency to be listed and transacted within its messaging platform. This acquisition is a huge step for Circle, a company that was founded just five years ago and that has already gone global after raising $136mm in capital over the years. This is not Circle’s first time conducting an acquisition, they purchased the mobile investing platform, Trigger Finance, back in October of 2017 for an undisclosed amount. Trigger Finance gears themselves as an “investing platform that encourages rule-based investing for every do-it-yourself (DIY) investor.” The combination of Circle, Trigger Finance, and Poloniex creates a team that is fixed to make a large impact on the crypto-finance space.

Bitcoin forks into a more secure and scalable Bitcoin Cash

Implementation of Segwit2x is just a couple of days away. Segwit is consensus based approach to increase network capacity without affecting the existing blockchain. The segwit consensus group was doing its best to avoid bitcoin blockchain split, however this outcome looks uncertain.

Hard fork most likely outcome

A group of miners, developers, investors, and bitcoin users are favouring user activated hard fork to create Bitcoin cash (BCC). The group is not happy with the Bitcoin Improvement Process 91 (BIP91) that leads to soft fork. They believe Segwit is a short-term solution for a long-term problem. This temporary solution will only delay the block size scaling conflict and will re-start again very soon. In the absence of required consensus support, a hard fork is most probable outcome on 1 August.

What is Bitcoin cash?

On 1 August, user activated hard fork will bifurcate the blockchain into two branches. Bitcoin cash will be continuation of the original blockchain. It will share the entire transaction history with bitcoin until the split point. Bitcoin and Bitcoin cash will essentially be two separate cryptocurrencies working independent of each other.

How is Bitcoin cash different from Bitcoin?

Bitcoin cash will be a more scalable and upgraded version of Bitcoin. It will be a bitcoin without segwit and hashing problems. Some of the prominent features of Bitcoin cash includes;

Bitcoin cash increases the block size to 8 MB from the existing Bitcoin block size of 1 MB

Bitcoin cash will enable peaceful co-existence of two blockchains. The replay and wipe-out protection feature will reduce disruption of blockchain users into separate groups.

Bitcoin cash introduces additional transaction features such as input value signalling for better security without quadratic hashing problems

It is considered as the simplest, fastest, cheapest and most secure form of money.

Bitcoin cash will be freely allocated to bitcoin private key holders after the fork. Cryptocurrency traders are withdrawing their bitcoins from online exchanges most exchanges do not allow access to bitcoin private keys. It is priced at $350, which is less than 20% of bitcoin price. The digital asset community is eyeing on bitcoin and bitcoin cash prices to benefit from the probable market correction.

Who supports Bitcoin cash

China based mining firm ViaBTC is amongst the early supporters. It launched new mining pool designed for mining ‘bitcoin cash’ and trade the same on its exchange platform. ViaBTC is the eighth largest mining pool holding over 4% of global mining hashrate. Bitcoin mining hardware company, Bitmain and Bitcoin mining pool, also have the contingency plans to support hard fork.

Online cryptocurrency exchanges such as Kraken, Bitfinex, HitBTC and Korbit are supporting hard fork by providing equivalent Bitcoin cash to its users while other exchanges such as Poloniex and C-Cex are following a more reserved approach. Bitcoin wallet companies like Trezor, Electron Cash, Bitcoin ABC, and Freewallet have enabled compatibility and security features for storing bitcoin cash.

Bitcoin security recommendations

As we are nearing 1 August, curiosity regarding final outcomes is exciting for the bitcoiners. Bitcoin holders are strategically buying more bitcoins with prospectus of getting equivalent number of free bitcoin cash if hard fork happens. Blockchain split may lead users to lose their bitcoins due to technical incompetence and inadequate safety measures.

Bitcoin holders having access to their private keys will be allocated with same number of bitcoin cash. Private key provides access to original as well as newly formed chain after the chain split. Many bitcoin businesses such as exchanges, software providers, cloud mining companies, and hardware wallet providers have designed different approaches to handle the possible fork. Bitcoin holders are recommended to check with their online exchanges regarding their contingency plans during the hard fork

Bitcoin holders should store bitcoins in a hardware wallet as it provides access to private keys. It will minimize the risk of losing bitcoins during hard fork and will also allow access to both chains after the forking. Bitcoin expert’s advice users to avoid making bitcoin transactions for at least two days prior to 1 August.