Is Segwit2x Going to Stick a Fork in Bitcoin? [bitcoin][crypto-currency][blockchain]
Yesterday I discussed the two Bitcoin Silvers and their possible implications for Bitcoin. Today, I answer the question about whether or not Segwit2x will stick a Fork in Bitcoin.
As Bitcoin's popularity and use has increased, its capacity to process the transactions taking place on the Bitcoin Blockchain has not. This has led to transactions on the Bitcoin network taking much longer and costing much more than usual. In some instances, Bitcoin transactions can remain unprocessed for several hours or longer. This is a problem for Bitcoin if it is to compete against other payment processors like Visa that process many more times the transactions without any delays.
Bitcoin was designed to process 1 Megabyte Blocks on average every 10 minutes, and within each block would be about 2,000 transactions. This is not enough throughput if Bitcoin is to go Worldwide. This dilemma is what all the Forking is about.
Since the software and the tokens created within it known as Bitcoin is decentralized, there is no one group or person who directs, controls or makes decisions for the Bitcoin Network. This same decentralization has removed control and direction from any one entity and placed it in the care of those who are interested in running and maintaining the Bitcoin software. This brings us to the Bitcoin miners, the Bitcoin nodes, the Bitcoin developers and the rest of the Bitcoin users.
The Bitcoin miners process the transactions taking place on the network everytime they find a Bitcoin Block. The Bitcoin nodes confirm the transactions processed by the miners, making sure that there are no counterfeit Bitcoins or double spends on the network. Each node, also very importantly, maintains a physical copy of the Blockchain, constantly cross checking with other nodes in the network to maintain integrity. The developers maintain the code and provide small updates as needed without changing the software architecture of Bitcoin (for the most part). That leaves the rest of the enthusiasts, traders, speculators and investors in Bitcoin.
All of these groups agree that in order for Bitcoin to remain a viable crypto-currency for the World, Bitcoin must be able to process more transactions than what it can currently handle. The problem is that these groups within the Bitcoin environment have their own agendas to address when deciding how to best fix Bitcoin. There is not a solution that leaves the entire Bitcoin network happy. There is no happy medium. The miners have more monetary concerns, while most developers worry about the viability of the code changes proposed. For example, bigger blocks from 1MB to 2MB would increase the blockchain size, which is currently about 140GB, much more quickly.
The different groups and interests within Bitcoin have attempted to come to several agreements beginning in 2016 with the Bitcoin Roundtable Consensus, where the 2MB Blocks were first proposed. This agreement was ratified in May, 2017 and is known as the Bitcoin Scaling Agreement, that took place in New York. This final agreement seemed to represent the desires of most every group involved with the Bitcoin Network. The agreement called for 2MB as well as what is now known as Segregated Witness. In brief, the Segregated Witness proposal allows for some data that goes with a Bitcoin transaction to be removed (or ignored) without affecting the originally intended outcome of the transaction, but making the transaction smaller in size overall. This will allow for more transactions to be processed within the same size block. The idea is that transaction will now be smaller, and the blocks will now be double in size.
Perfect, you say! Not so fast.
The plan called for implementing the Segregated Witness (Segwit) part first, on August 23, 2017 as a "soft fork." This has allowed more transactions to be processed, lower fees and less unconfirmed transactions. The second phase, known as Segwit2x is set for around November 17, 2017, at block height 494,784. So far so good, this is all part of the plan. The problem stems from the code that will be used to implement Segwit2x was itself not ratified by the New York Consensus agreement that took place back in May. The idea behind it was ratified, but some members of the consortium are having second thoughts now that they have seen the code to be used. The code to be used for Segwit2x does not have Replay protection, to the consternation of many.
The lack of replay protection by the developers appears to be purposeful, yet this is causing some supporters of Bitcoin Segwit2x (B2X) to no longer stand behind it. It was supposed to be a smooth transition into B2X with it becoming the new BTC and the old BTC phasing out. Now it appears that B2X will fork while the original BTC will continue on under its supporters. Herein lies the problem of the replay attack. Since B2X will not be implementing replay protection this could lead to users losing some or all their coins. This is causing many to worry, while some are taking matters into their own hand like Coinbase. Coinbase will recognize both forks for those holding BTC, and they will also implement some sort of replay protection within their own internal wallets. Bitcoin "hodlr's" that have their Bitcoin on hardware wallets like Trezor or Ledger will have to consult the wallet manufacturer for further information and instructions. Bitcoin "hodlr's" that hold their Bitcoin in personal wallets such as the Bitcoin wallet will have to tread very carefully on November 17, 2017 when moving their Bitcoins or risk losing them and/or the Bitcoin Segwit2x coins also.
Decentralization, autonomy and self-governance are wonderful things until they are not. Bitcoin's inability to progress or update without someone sticking a fork in it is the downside to not having a central authority figure. Nonetheless, I believe that Bitcoin and Bitcoin Segwit2x will overcome this latest challenge and will come out stronger because of it, proving that self-governance, self-determination and transparency via blockchain are the wave of the future.
11/08/2017
@streetstyle
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Everybody wants a piece of bitcoin blockchain i can't think how many forks we will see in the following years. Regards
This is a very valuable article about Bitcoin and its Hard forks.
Hey....
Such a good post like cryptocurrency...
That is very informative...
Thank's for sharing
@following and upvoted
wow fantastic post, that's why our transactions some time stucks and takes ages to get confirmed, thanks for sharing your good knowledge and information with us about bitcoin and the reasons behind forks. Stay blessed
yes it is and it has been going on for a while but they still haven't really agreed. At this point they have no choice but to continue on and fork. To me, this is more of a big deal fork than the Bitcoin Cash fork, only because Bitcoin Cash came out of nowhere, almost rogue. But this time, it is from the group that had agreed and now it seems like by leaving out the replay protection, the developers are forcing it and that created a rift. I think a little ego is involved here too.
yes i heard somewhere that BTH developers are using 8mb block size and i think that's because of that confirmations problem, but i don't use BTH because i don't trust them, i wish segwit bitcoin also implements bigger blocks so atleast we get our money in time.
Excellent article and good analysis, I agree with you this fork will happen, it will be more difficult and many hope that all the problems that Bitcoin now has are solved. Let's see what happens. Thank you @streetstyle
Thank you info shearing nice post uplode pelese my vote
Thanks
Very Informative, Worth Reading, You got a Upvote
Im getting excited about it!! thanks for such a usefull info!)))
thanks for your article, but what the risk on 17th, november, steemian are in the risk?