Bitcoin, SegWit2x and everything you need to know about 1st August @BlockRush

There is no doubt about the fact that the Bitcoin network needs improvement. The small block size of only 1 mb worth of transactions every 10 minutes has slowed it down considerably and caused many merchants to shy from it.

In the past several proposals and attempts were made to improve the Bitcoin protocol including Bitcoin XT, Bitcoin Classic and Bitcoin Unlimited. However, a new proposal under the name of SegWit2x which is a combination several of the previous ideas has gained enough acceptance to effect an activation at the end of this month.

Note that in this post we would be using two similar but different terms which could be confusing, please note them carefully so as to avoid confusing them: (1)SegWit and (2)SegWit2x.

What is SegWit2x?

SegWit2x is a portfolio of loosely gathered proposals that seek to upgrade the Bitcoin network. The basic proposals of SegWit2x include:

• implementation of Segregated Witness(SegWit) which will increase the number of transaction in a block without increasing the clock cap, along side several improvement
• increase Bitcoin's block size from 1mb to 2mb

Who supports SegWit2x?

Almost everyone in the Bitcoin community partially supports SegWit2x. The point where there is division is about the increment of the block size.

Some of the supporters of SegWit include Coin Base, BitPay, Blockchain, a huge majority of Bitcoin miners and some notable Bitcoin developers including Gavin Andresen.

However Bitcoin users and Bitcoin Core developers who serve as "guardians" of the Bitcoin network oppose the block size increment on the grounds that it would destroy the network. After all after the implementation of SegWit, the Bitcoin network would be faster at despite being at the same block cap hence no need for SegWit2x.

Those who are against SegWit2x have proposed another solution called BIP148 and will be competing with SegWit2x on 1st August for adoption by miners.

What happens on 1st August 2017?

This is how the battle will unfold:

1. SegWit testnet will go live on 14th July for early adopters to evaluate it
2. On July 31st 2017, SegWit has been scheduled to be activated. As at the time of writing, SegWit has the support of 80% of the Bitcoin network and if things remain that way then the hardfork will happen
3. The battle for supremacy will be fought between SegWit and BIP148 from the dusk to the dawn of 31st July, with the apparent victor declared on 1st August
4. Three months after SegWit, SegWit2x advocates launch their attempt increase the block size. this is where the main battle will be fought

What are the potential outcomes?

Whatever the outcome of 1st August, the Bitcoin network would never be the same again. Here are some possibilities of 1st August's SegWit activation along side their potential effect:

1) SegWit succeeds: this would be the best possible outcome for Bitcoin as it would keep the network intact, retain investor and user confidence which would see a possibly price jump! More and more businesses would begin to embrace Bitcoins.

2) SegWit fails: well this would leave the future of Bitcoin in the hands of BIP148 supporters and developers who would have to rise to address the challenges SegWit was supposed to solve.

3) Segwit as well as BIP 148 wins: well this would be interesting but it would mean a split in the Bitcoin network.

4) There is no winner: this could happen is some sort of confusion arises causing miners to withdraw to themselves, abstaining from both SegWit and the BIP 148; waiting to see what would happen. This outcome would be weird, but is not likely to ever happen.

Important points to remember

• SegWit is generally supported by most of the Bitcoin network
• SegWti2x which is proposes an increment in block size after SegWit is the point of contention
• Whatever happens, there is an 80% probability that SegWit would be activated on 1st August
• SegWit2x would happen 3 month after SegWit and will be the main battle
• Any disturbances in the price and stability of Bitcoins could cause investors to rush to other crypto currencies - alt coin prices up
• In a twist of events, any bubbles in Bitcoins could also cause investors to loose faith in other crypto currencies - alt coin prices down

What should Bitcoin owners and users do?

If you have no Bitcoins in your possession, you might be a bit relaxed. However if you do have Bitcoins, you would definitely be caught in the SegWit/BIP 148 crossfire on August 1st, 2017.

Like during any war time, the wisest thing to do would be to remain glued to your radio(sources of information) during the entire process. You do not want to be left behind enemy lines.

With the understanding of SegWit and SegWit2x as explained in this post, if you support it then you should move your Bitcoins to wallets of wallet providers how support it once SegWit is activated or else risk having your Bitcoin suck on the fork chain.

Until the hardfork begins, you might want to keep your Bitcoins offline so you can exercise full autonomy over them.

Disclaimer: @BlockRush is no Bitcoin expert; you should consult one on what to do.

What do you think?

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