UK’s Oldest Crypto Exchange to Delist Ethereum and Focus Solely on Bitcoin
Coinfloor, the U.K.’s longest-running cryptocurrency exchange, plans to delist ethereum next month, citing an unclear future of hard forks and the need for onerous technical support for the second biggest coin by market capitalization.
The company will also delist bitcoin cash, the splinter currency founded two years ago in the aftermath of bitcoin’s heated scaling debate. Starting Jan. 3, Coinfloor will support only bitcoin, whose eleventh anniversary happens to fall on that day.
The plan comes ahead of the launch of ethereum 2.0, tentatively planned for early 2020, which will begin the process of shifting the network away from the energy-consuming proof-of-work (PoW) consensus mechanism to proof-of-stake (PoS).
Coinfloor’s decision suggests that nurturing a team with the specific expertise to follow the technical trials and tribulations of coins like ethereum may be too expensive for smaller crypto players, particularly if this constitutes only a small part of their trading volume.
From the point at which it starts next year, ethereum’s platform upgrade “could take years to complete,” said Obi Nwosu, founder and CEO of Coinfloor. The complexity of the operation “means for a period of time there could be two versions of ethereum running.”
According to some ethereum developers, it’s likely to be years before the old ethereum PoW chain is fully merged into the new PoS network, leading to current discussions around ways to create a secure bridge between the two chains.
Founded in 2013, Coinfloor is a small exchange, with 24-hour volume of trading between bitcoin and GBP at just $450,000, according to CoinMarketCap, compared to $1.5 million of BTC/GBP at Coinbase Pro.
In Nwosu’s opinion, the headache of accommodating its planned upgrades was not worth a diminutive increase in his overall trading volumes.
“You have to maintain that currency, every time they make an update or a change, and ethereum has got a long way to go with updates and changes to the platform,” Nwosu said.
Coinfloor, which is licensed by the U.K. Financial Conduct Authority (FCA) and has access to the country’s Faster Payments Service for instant fiat deposits and withdrawals, waited for regulatory certainty around ethereum before finally listing the token around the end of last year. Trading in ethereum comprises a tiny fraction of the exchange’s volume which is predominantly bitcoin, Nwosu said.
Similar considerations informed Coinfloor’s decision to delist bitcoin cash.
“In terms of traction compared to bitcoin, [bitcoin cash] has gone from a third of the market cap to one-tenth of market cap over last year. So it was under a certain level of support and interest for us to expend resources on listing it,” Nwosu said.
As it doubles down on bitcoin, Coinfloor will also explore new avenues in areas such as lending in the coming year, Nwosu said.