GDAX’s decision to list Bitcoin Cash (BCH) was based on factors such as customer interest, support from developers, the security of the network, its market cap, trading volume, and consideration of its digital asset framework.
Following this announcement, these ordes books have been created; they will remain in post-only until liquidity is high enough to allow trading.
How Bitcoin Cash Came to Be
Bitcoin Cash was created following the fork of Bitcoin on August 1st, 2017. Each customer who had BTC on GDAX was credited with the same amount of BCH in his or her account. The BCH balance is equal to the BTC balance at the time of the fork.
What Is a Fork?
In recent times, there has been a lot of hype about forks in digital currencies. This simple explanation leaves much of the technicalities about a fork out, focusing only on what one is. A fork simply means a change to the software behind a cryptocoin, leading to two unique versions of the blockchain that share a history. They can be only for a short while (temporary fork) or permanent. The latter leads to two new versions of the blockchain. If that is the case, two new digital currencies are born.
What Is the Purpose of Forks?
Forks occur for many reasons. For instance, a change could be proposed to the digital currency protocol. These changes could help to make things more efficient. However, for this to occur, many people need to agree to it. This is the same as what happens when cellphone networks are changed. If the phone companies do not agree with them, the changes cannot be implemented.
What Happens to Cryptocoins When a fork Occurs
In most cases, you will retain your current coins. However, in some exchanges such as GDAX, you will get support for both BCH and BTC. Even at these exchanges, various factors have to be checked before a forked coin can be supported. For instance, they have to ensure that they have developer support for it. Besides that, exchanges need to ensure there are sufficient trade volumes. Otherwise, they will not be able to afford the cost of supporting a new coin.
Other factors to be considered with a new coin are the market value and the demand. While BCH received a lot of market attention and its value rose, other Altcoins may not be so lucky. BCH was lucky that Bitcoin was already widely accepted in the industry.
Another important point to consider for a new coin is safety. Since it is so new, it is hard to know whether it has any loopholes that could make it easy to steal. Most exchanges will wait until they have conducted numerous safety audits, just as GDAX did with BCH.
Do you think this latest move by GDAX will be beneficial to BCH? Leave us your thoughts in the comments below.