Bitcoin fork November. What exactly will happen when the bitcoin segwit2x fork is activated in November? What happens if SegWit2X does not take place?
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Hello! Mike Belsh(CEO BitGO) On November 8, he officially announced that the planned Bitcoin launch in mid-November would not take place.
In his appeal, which was also signed Wences Casares(Xapo), Jihan Wu(Bitmain) Jeff Garzik(Developer: Segwit2x) Peter Smith(Blockchain.info) and Eric Vorhees(ShapeShift), Mike Belsh wrote the following:
The Segwit2x initiative began in May with a simple goal: increase the block size and improve the scalability of the Bitcoin network. At the time, the Bitcoin community was in crisis, after nearly three years of intense debate and a consensus for Segwit that seemed just a dream with 30% support among miners. Segwit2x achieved its first success in August when it broke the deadlock and was quickly implemented Segwit activation. Since then, the team has focused its efforts on the second stage of the project - increasing the block size up to 2MB.
Our goal has always been a smooth upgrade of Bitcoin. While we strongly believe in increasing the block size, there is something else we believe in more strongly: maintaining cohesion bitcoin community. Unfortunately, it is very clear that we have not been able to reach sufficient consensus regarding increasing the block size. Continuing along this path would divide the Bitcoin community, which would hinder the development of Bitcoin in the future. This was never the goal of Segwit2x.
As blockchain fees increase, we believe that an eventual increase in network throughput will be inevitable. When this happens, we hope that the Bitcoin community will join forces and direct them towards searching for a solution, possibly with an increase in block size. Until then, we are suspending our plans to increase the block size to 2MB.
We want thank everyone, who made constructive contributions to the development of Segwit2x, it does not matter whether you were for or against. Your efforts are what makes Bitcoin great. Bitcoin remains the largest form of money humanity has ever seen, and we still committed to protecting and strengthening its growth around the world.
Mike Belshe, Wences Casares, Jihan Wu, Jeff Garzik, Peter Smith and Erik Voorhees.
Let me remind you that in May 2017 year, large cryptocurrency companies, including Abra, BitClub Network, Bitcoin.com, BitFury, BitGo, Bitmain, BitPay, Blockchain, Bloq, Circle, Xapo and others, signed the so-called New York Agreement, which concerned the activation of Segregated Witness and the subsequent increase in the block size to 2MB.
There was no agreement from the developers among the signatures Bitcoin Core, which is traditionally considered the official client of the Bitcoin network. This caused controversy in the Bitcoin community, some were in favor of the New York Agreement, others were against it. Such a difference of opinion could lead to a split in the community, which could result in the splitting of the Bitcoin network.
The rejection of the Segwit2x hard fork means that in the future Bitcoin has every opportunity for a smooth and deliberate update, which in turn should have a positive impact on the BTC price.
After the news about the cancellation of the fork, the price of Bitcoin almost reached $8,000, but then there was a rollback to $7,000. At the time of publication of this article, BTC is trading at 7077$ .
The developers of the controversial plan to increase the capacity of the Bitcoin network Segwit2x are preparing to begin its implementation and change the size of the “mined” block in the Bitcoin blockchain from 1 MB to 2 MB. If this initiative receives proper support from developers and miners, then the second hard fork of the Bitcoin network will occur this year and another, already third, competing version of the popular cryptocurrency Bitcoin will appear.
Recently, the Segwit2x developers confirmed the block number on which they plan to carry out a hard fork of Bitcoin and begin mining 2 MB blocks. In a recent post on Github, one of the developers Jeff Garzik wrote that the Segwit2x hard fork will be activated at block 494.784 in November 2017.
Note that the activation of Segwit2x will be preceded by the transition of traditional Bitcoin to the improved Segregated Witness, or SegWit, technology. This is a new way of recording data in blockchain blocks, which, as we have already written, will allow you to fit more transaction records into one block while maintaining its previous size (1 MB) and moving some of the information into an additional block. The transition should take place later this month (tentatively August 23). Note that the implementation of SegWit is a soft fork with a gradual transition to updated rules and without separation into a separate branch.
Work on Segwit2x was first announced in May. Among Bitcoin community enthusiasts, the document was called the New York Agreement. It was signed by 58 companies from 22 countries, including Bitcoin.com, Bitmain, Coinbase. According to the authors of the document, these companies have 83% of the computing power of the entire Bitcoin community. The participants agreed to switch to Segwit2x after the implementation of SegWit. The Bitcoin Core team is behind the development of Segwit2x.
As for the Bitcoin Cash cryptocurrency (abbreviated BCH or BCC), launched on August 1, the creator of the protocol is a former Facebook programmer from San Francisco, Amaury Sechet. The first version of the Bitcoin Cash protocol was called Bitcoin ABC. The plan to launch Bitcoin Cash was put in place with the participation of Bitmain, a company that provides about 20% of all computing on the Bitcoin network.
The feasibility of launching Segwit2x raises big questions, especially now that there is Bitcoin Cash with increased blocks. It is believed that the disagreements between the Bitcoin Cash and Segwit2x projects are more ideological than technical. In addition, with the adoption of SegWit in the Bitcoin blockchain, the block size will no longer determine the efficiency of the network. Only time will tell what fate awaits Segwit2x. Meanwhile, the Bitcoin Cash cryptocurrency fell slightly in price two weeks after its launch (one coin costs $300), but its support and mining by users and companies continues. During this time, the rate of regular Bitcoin increased by one and a half times - from $2800 to $4200.
Let me talk a little about the situation with the current bitcoin fork - segwit2x. What exactly will happen in mid-November 2017? Will all exchanges and users switch to the new btc1 wallet (it is the one that is positioned as compatible with segwit2x technology) or will everyone, including miners, say oh, we made a mistake, bitcoin core honeys, let's live together, etc.?
So, I think this is exactly what will happen - miners, suddenly, will not support the activation of the 2MB block size limit until bitcoin core says so. For example, slush pool is doing this now under a false pretext. It’s almost certain that somewhere a couple of weeks before the start of the fork, just so that the recalculation of the number of blocks can happen after that, or immediately after the launch of segwit in mid-September, the guys from bitcoin core will offer “well, just a great solution” to expand the limit by block, with a deadline of about half a year, and everything will be fun, with dancing and bread and salt, they will accept this new plan, and the bitcoin segwit2x fork will be released together exactly according to the same plan, as happened with bitcoin cash. The exchanges will again start trading behind closed doors, the exchange rate will again be simply wonderful, everyone “outside” will be salivating, but there will be no food. And most importantly, this fork will be considered just as useless and temporary, plus one to the huge army of alts doomed to oblivion.
What is Segregated witness
And we will get the next 100 episodes of this “Santa Barbara”, called “2mb block”. And we will pay even more commission, but then, because the following will happen:
By this time, Segregated witness will have been activated for a month, and the updated wallets will begin to disperse among users.
In short, these are transactions in a new format, thanks to which it is possible to move part of the data outside the standard block of the old wallet in such a way that it understands this transaction as valid but incomprehensible, i.e. Legacy clients will receive money, but the balance will show zero, but new wallets will store and process the old block and the additional one with the necessary information on the transaction correctly. This is such a clever way to increase the block size by the number of transactions (about 2-2.5 times in an ideal situation) compatible with old clients, even the opinion of miners would not need to be asked (they can use the old version of the wallet without segwit support), although their infrastructure support is all is equally necessary, otherwise they might be offended - maybe this is what happened.
Of course, universal happiness will not come immediately; it will take months for clients to upgrade. Many popular wallets, by the way, have prepared in advance, so the rest is up to the mining pools and exchanges, they are the main providers of transactions, and the rest will follow them, because all the banquet participants hold their accounts on the exchanges one way or another.
Well, cool, there will be a lot of transactions in the block, and their value will go down
The network will suddenly be unloaded, the current 1MB+3MB segwit block will last for a long time, half a year or even a year. During this time, the lightning network will finally be released, and for its part will add even greater unloading of the blockchain from transactions. It's no joke, you just need to block a little money on your part and on the other side, for example, an exchange and/or a mining pool, and that's it, you're in a network of instant and ultra-fast transactions, occasionally issue clearing transactions that equalize your balances between LN connections and that's it - hundreds and thousands of transactions in both directions, you need to send 1 satoshi - no problem. And what low commissions there will be, you’ll be pumped, dream, one and a half satoshi per transaction, half a satoshi per transaction, zero - if you are a member of some club, or some other body. Happiness and another "native"!
And as a result, everyone will forget about the problem of lack of space in the block
Not for long - a year or even three. And this will be the worst! The problem has not gone away! There is a block size limit and there are no sane tools to expand it! All that miners and bitcoin core were able to offer the community was a one-time expansion to a constant using a hard fork, and segwit doesn’t stand out much here! 2-8MB, it's all bullshit! Everyone will get used to it. After all, the increase in the cost of a transaction in the blockchain will go just as unnoticed as I described in the first article - the frog will cook slowly!