Kelly Robertson
The SegWit2x hard fork has been canceled! The Bitcoin network won’t be updated with increased block size and improved scalability. After nearly 3 years of heavy debate, the consensus for SegWit now only has 30% support among miners.
Nonetheless, at some point in the future some update to the Bitcoin network will be launched, and in the meantime we want to explain what SegWit2x is all about. Let’s delve into the matter, shall we? Here are 5 things you should know about SegWit2x…
1. How SegWit2x improves Bitcoin?
SegWit2x seeks to upgrade Bitcoin in two ways:
First, it aims to enact the code optimization Segregated Witness (SegWit), which alters how some data is stored on the network.
Proposed by Bitcoin Core developer Pieter Wuille at the end of 2015, SegWit increases the volume of transactions that fit into each block without raising the block size parameter. It also removes transaction malleability, an issue that once resolved could lead to a number of network improvements.
Second, it aims to increase the size of the block in the blockchain from 1MB to 2MB. This increase would make transactions faster to process and approve.
And for what it matters, a few alternative bitcoin implementations — such as Bitcoin XT, Bitcoin Classic and Bitcoin Unlimited — wanted to do the same thing, but none have yet reached the necessary threshold of support.
2. Who supported SegWit2x? Who was against it?
Roughly a month before it was cancelled, SegWit2x was supported by a significant number of high-profile bitcoin businesses and individuals. These include:
- Most of the larger mining pools
- Bitcoin startups such as Coinbase, BitPay and Blockchain
- Notable developers, including former lead maintainer of Bitcoin Core, Gavin Andresen.
On the other hand, opposing the plan and (at least) for the time being – the winning side, includes:
- A few businesses, including Bitrated and Bitonic
- Many node operators and bitcoin users
- Nearly all Bitcoin Core developers responsible for maintaining the software.
There was (and still is) a Wiki page with a longer list of those who support, oppose and are undecided.
3. What was at stake?
The outcome of SegWit2x depended on how many users have adopted the proposal. If it got support of only a part of the community who would decide to proceed with the update, the network would’ve been split and we would yet again get another bitcoin variant. At that time it would be uncertain what would happen to that new Bitcoin and would be left from the original cryptocurrency. Chances are some price decrease would follow any such move, and I guess that was the reason why this fork was cancelled.
“Unfortunately, it is clear that we have not built sufficient consensus for a clean blocksize upgrade at this time,” the developers deciding to cancel SegWit2x explain. “Continuing on the current path could divide the community and be a setback to Bitcoin’s growth. This was never the goal of Segwit2x.”
In other words, the entire Bitcoin network and the value of the cryptocurrency was at stake, and without the sufficient community support, it was wise not to proceed with the update.
4. What’s the impact of the SegWit2x cancellation?
Price wise, Bitcoin went down on the news, only to recover a few hours later. The community is yet again united, helping the cryptocurrency cement its dominance in the space.
As of 1:30 p.m. ET on the day of the cancellation, bitcoin was trading near $7,700.
And we used to argue it will reach $5,000 by the end of this year. We were wrong, but in a good way… 😉
5. What’s next for Bitcoin?
We think it will keep thriving, and in a way the move to cancel the SegWit2x update – proves that. Developers pushing for this update realized that the community is more important than their personal ambitions. Here’s how they’ve put it:
Our goal has always been a smooth upgrade for Bitcoin. Although we strongly believe in the need for a larger blocksize, there is something we believe is even more important: keeping the community together.
However, they were also quick to point out that as fees rise on the blockchain, it will eventually become obvious that on-chain capacity increases are necessary. When that happens, we hope the community will come together and find a solution, possibly with a blocksize increase. Until then, you are free to join the party. Good luck! 😉
