Coinfloor intends to delist the second biggest coin by market cap – ethereum and focus entirely on Bitcoin as announced in a blog post. The longest-active crypto exchange in the United Kingdom is planning to do this shift in direction next month and some of the reasons for it are the excessive technical support needed and the ambiguous future of hard forks.
As of January 3rd, Coinfloor will also delist bitcoin cash, the disintegrated currency launched after the serious scaling debate related to Bitcoin. Curious or not, Bitcoin’s 11th anniversary is exactly on that day.
However, the oldest still active exchange in the UK (founded 2013), Coinfloor is a relatively small operation. As shown on CoinMarketCap the exchange has a $450,000 24-hour trading volume between GBP and bitcoin.
Still, Coinfloor has access to the United Kingdom’s Faster Payments Service for instant fiat deposits and withdrawals and is licensed by the U.K. Financial Conduct Authority (FCA).
Coinfloor’s change in offerings will actually come just before the launch of ethereum 2.0, which is currently planned for the beginning of 2020. In that period the network will slowly shift from proof-of-work (PoW) to proof-of-stake (PoS).
It seems that maintaining a professional team that possesses specific knowledge on ethereum is not that cost-effective, especially if only a modest part of your trading volume relies on ethereum.
Another factor is probably the upcoming network upgrade which according to Coinfloor founder and CEO, Obi Nwosu, “could take years to complete”.
As this is a very complicated activity we might end up in a situation where “for a period of time there could be two versions of ethereum running”.
As a number of ethereum developers expect, it will be years until the current ethereum PoW is entirely fused into the upcoming PoS, which is probably the reason for the recent thoughts on building a secure bridge between the old and new chains.
As Nwosu’s point of view shows, supporting ethereum’s projected upgrades will not be so beneficial for the exchange:
“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.”
The reasons to delist bitcoin cash are similar, according to Nwosu:
“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.”
In the upcoming year, except from focusing primarily on bitcoin, Coinfloor plans to search for income in new areas of business such as lending digital assets.