The increasing regularity of Bitcoin forks has led to new token creation as the Bitfinex exchange has come up with a way to provide trading on forked coins via its Chain Split Tokens (CSTs). These CSTs allow Bitfinex customers to speculate on the value of potentially incompatible ledger units related to the forking events on cryptocurrency blockchains. Quite simply, CSTs allow Bitfinex customers to trade the new strains of forked coins before they are readily available. Bitfinex is currently offering a number of token options related to Bitcoin Core forks, these include:

BT1 , which refers to the CST that represents the widely accepted current Bitcoin Blockchain.

, which refers to the CST that represents the widely accepted current Bitcoin Blockchain. BT2 , which refers to the CST that represents the Segwit2x consensus protocol.

, which refers to the CST that represents the Segwit2x consensus protocol. B2X, which refers to the digital token, converted from BT2s after the fork and the end of Bitfinex’s stated Contract Settlement Period.

While this is relatively straightforward and mirrors the trading options provided by exchanges such as Binance and HitBTC, Bitfinex has been keen to stipulate exactly how the CSTs can be traded.

Key Points

The trading of these tokens is limited to a contract period that started on October 5, 2017, and ends at 11:59:59 pm UTC on December 31, 2017. Trading is also linked to the Chain Split Event that forks the incumbent Bitcoin blockchain at Block Height 494784 and produces an alternative blockchain based on the consensus protocol of SegWit2x.

Bitfinex allows for the exchange of Bitcoin for BT1 and BT2 using the Site’s token manager platform right up until the Chain Split Event with the rate for exchange being 1 BT1 + 1 BT2 for each Bitcoin, customers can also trade CSTs by using US dollar purchases.

After the Chain Split Event, CSTs shall be converted on a 1:1 basis to Digital Tokens on their respective blockchains at Contract Settlement with any open orders cancelled at Contract Settlement. In addition, in the case of BT2, SegWit2x will only be deemed to exist only if a new blockchain has split from the current Bitcoin blockchain and is incompatible with the core chain.

Any settlements of BT2 shall be to B2X and if Bitfinex determine that no Segwit2x blockchain actually exists than BT2 tokens shall be deemed to have a value equal to zero and shall be removed from the platform. However, any open orders for BT2 trading pairs will be converted into open orders for corresponding B2X trading pairs.

Trading using CSTs is a risky business and Bitfinex is looking to cover itself as much as possible. For instance, the settlement of BT1 into BTC and BT2 into B2X may be delayed for as long as Bitfinex deems appropriate and the exchange will also make a decision on the value of its CSTs in the unlikely event of the ‘fork’ resulting in one compatible blockchain. Bitfinex has been clear to stress that it assumes no liability or responsibility for any losses incurred in trading the tokens.

Traders should also be aware that the terms and conditions outlined relating to the purchase and trade of CSTs can be amended, changed, or updated by Bitfinex at any time and without any prior notice. As a result, only the bravest of traders should jump into this activity and should be sure to regularly check the Bitfinex site and read their terms and conditions thoroughly.