After Misleading Users, BitPay is Being ‘Forked’

A backlash against BitPay for misleading users has resulted in their software being forked, meaning its code will be altered so that users have a Bitcoin Core based option for bitcore. On August 18, Bitcoin developer Nicolas Dourier begun to fork the code from BitPay’s bitcore so that merchants can get paid in bitcoin while avoiding upgrading to SegWit2x, which has weak support across the ecosystem.

BitPay, a large payment processor of bitcoin for merchants, allowing them to receive payments with zero confirmations, released an update for its customers on August 17, advertising it as an upgrade to SegWit. However, instead of getting merchants ready for the SegWit activation on August 21, they lead bitcore users to setup a btc1 node. Effectively, they are leading their users to prepare for the SegWit2x hard fork, which is unanimously rejected by the Core developers.

What Bitcore Users Need to Know To Be Ready for #Segwit Activation | The BitPay Blog https://t.co/g7kBJxbZ3R #Bitcoin — BitPay (@BitPay) August 17, 2017

Bitcore is an open-source app that serves many merchants, allowing them to accept bitcoin as payment and interact with the Bitcoin Blockchain.

The contentious hard fork has support among some merchants but is expected to lead to another split in bitcoin in November. The SegWit2x team published their intentions to hard fork on block number 494,784 of the Bitcoin Blockchain on August 16. Barry Silbert’s Digital Currency Group was one of the early investors in BitPay and brokered the New York Agreement, also known as SegWit2x, which was supposed to be a compromise between miners, developers and businesses. But critics see SegWit2x as a corporate takeover attempt of the Bitcoin network.

BitPay’s actions have been criticized because they are not giving their users a choice to have an updated bitcore build based on Bitcoin Core. Secondly, by forcing users into btc1 the software for SegWit2x, they introduce many risks for users who run unstable software without the necessary safeguards.

For example, in November it is likely the chain will split with the activation of the SegWit2x hard fork, yet the btc1 software has not implemented any replay protection, which was at least incorporated into the fork of Bitcoin Cash. With no replay protection, it could cause users who follow BitPay’s advice and upgrades to lose money, as spending B2X coin will also spend the bitcoin associated with that address.

Does anyone know how Bitpay intends to prevent this kind of B2X vs BTC confusion and loss? Will Bitpay return the BTC? cc @spair @jgarzik https://t.co/jSXOPUjJV3 — Doniali ⚃ (@doniali4) August 18, 2017

Bitcoin Community Reacts, Takes Action…

By telling users to upgrade and framing it as SegWit is very irresponsible, as users would be unaware that they are not on the legacy Bitcoin chain, that is the blockchain with the most proof of work. But the community has responded, with Bitcoin developer Nicolas Dorier giving merchants the option to remain on the legacy chain and not use BitPay’s upgrade, but yet still use the payment platform utilized by the company.

I will provide a Bitpay compatible API for those who want to keep Bitcoin payment deployed for using Bitpay but without the bitpay part. — Nicolas Dorier (@NicolasDorier) August 18, 2017

Also, a ready solution is already available, which was worked on by SatoshiLabs. The company behind the Trezor hardware wallets upgraded the bitcore code to integrate SegWit, while strangely enough, there was inertia in this regard on behalf of BitPay.

With not everyone technically minded and in the know about the latest happenings in Bitcoin, BitPay’s move played on the ignorance of the wider public. With many merchants most likely not deeply invested or involved in the Bitcoin scaling debate, such a deceitful move is not in the best interests of the community. By setting up their customers for potential losses, the move which was quickly called out by prominent members of the community, with a barrage of tweets aimed at BitPay on August 18.

A number of bitcoin-related businesses have even stopped using BitPay in response, such as okTurtles, a foundation supporting decentralization technologies, and respected bitcoin wallet, SamouraiWallet.

We've removed @BitPay from our donation page for its attempt to defraud the Bitcoin community. https://t.co/Abam3YHRcJ https://t.co/AxmLVm9zJf — okTurtles Foundation (@okTurtles) August 18, 2017

We cannot and will not in good faith continue to use or recommend others use @BitPay as a processor. https://t.co/wlDIvWtbni — Samourai Wallet (@SamouraiWallet) August 18, 2017

Trust is sacrosanct in the Bitcoin ecosystem, and BitPay’s negligence is leading to a loss of support for the company amongst the community. Once trust is broken, it is challenging to regain it.