Billions and Billions Held Somewhere by the Major Exchanges!
Recently Bitcoin Gold split from Bitcoin. The process is known as a hard fork. Quite literally, a duplicate chain is created and each goes their own way from there. If you happen to hold Bitcoin before the fork you are entitled to equal number of coins in the new coin/blockchain.
Today BTG or Bitcoin Gold has a circulating float of 16,700,586 and Bitcoin has a circulation of 16,734,587 according to coinmarketcap.com. Poloniex and Coinbase cold wallets may contain 500,000 to 1,000,000 coins stored in their vaults. As of writing, BTG has a $4.2 Billion USD market cap and is the eight largest crypto currency. You may be asking, what happens to my BTG coins if I buy and sell or move them to another exchange or my own cold wallet.
The answer is not simple. It depends.
It depends on a number of factors including time, trust and wether you still have an active account on their platform.
- Timing is everything, suppose you were given your BTG today and you decided to sell at the $252 price. Thats a nice little bonus! But what if Coinbase decided not to give you the BTG for a few months and the price moved to 0? We can agree that people would be a little pissed off!
- Next it depends on you trusting that your hot wallet will act in your best interest. Coinbase has been valued at over 1Billion as a company. Imagine if Coinbase said we are not ever going to release your BTG (earlier this year the Bitcoin blockchain split for Bitcoin Cash which now has a $23 Billion market cap). Someone, somewhere at these companies has hundreds of thousands of coins that are registered pre-hardforks and have not been distributed to the rightful owners. Imagine if they need to move these coins from the hard wallet to a hot wallet for withdraw (think run on a bank). Do they properly have yours with BTG and BCC still non-forked properly segmented?
- What if you move wallets, close your account or simply forget you have the wallet and change your email address? Would they come chasing you to try and find you? Is it in their best interest?
By simple math, Coinbase and Poloniex are sitting on $1,056,000,000 in customer BCC and $189,000,000 of BTG! Imagine if they they decided not to give you your coins…