Clearing Up the Segwit2x Hard Fork Confusion
Yet another Segwit2x Hard Fork Guide
With approximately 9 days to go, the price of Bitcoin has been surging to new all-time highs. Most people are expecting the windfall of getting the same amount of the Segwit2x coin as they hold in Bitcoin. However, many do not understand what the Segwit2x hard fork actually means. To help everyone better understand what is actually going on, as well as make sure everybody knows that there are risks involved, issues that have not been resolved, many unanswered questions and a whole host of other things that make this upcoming hard fork something to watch with extreme caution.
Some important things to consider, each point will be expounded upon in greater detail:
- A hard fork is simply a change in the rules that govern the Bitcoin network.
- The Segwit2x hard fork is not related to the SegWit implementation that occurred earlier this summer.
- org, representative of the Bitcoin Core Development team has denounced Segwit2x.
- The upcoming hard fork may or may not result in the creation of a new cryptocurrency.
- The adoption and implementation of the new Segwit2x software by Bitcoin miners will be the primary factor in determining the state of Bitcoin after the hard fork occurs.
- The Segwit2x hard fork will occur with the confirmation of block 494,784, which is going to occur on or around November 16, 2017 at 5:14 a.m. (Eastern Standard Time -EST).
- Segwit2x being implemented to increase the block capacity size from 1 MB to 2 MB.
- There are currently enough supporters and opponents to make the upcoming hard fork unpredictable at best.
- There are large companies using deceptive methods regarding the Segwit2x hard fork.
- In the interim, Bitcoin prices along with Bitcoin cash and Bitcoin Gold prices are surging to new all-time highs.
Understanding What the Segwit2x Hard Fork Is
Defining “Hard Fork”
The technical definition of a hard fork, according to Investopedia.com is:
“… a radical change to the protocol that makes previously invalid blocks/transactions are valid parentheses or vice versa), and as such requires all motor users to upgrade to the latest version of the protocol software.”
In plain English, a hard fork is in upgrade or change to the currently running software that will implement changes that are significant enough that if all of the computational power (miners) that are running that software do not agree to the changes, the result is that you have some running the old version and some running the new version. This creates two separate and independent blockchains, thereby creating a brand-new cryptocurrency coin in the process. The way that the network can agree to the changes is by each individual miner, simply installing and running the new software. In order for the new software to take effect in hard fork to actually occur a certain percentage of the people who mine Bitcoin or “Bitcoin Miners” must implement and run the new software, and effectively mind Bitcoin using the new protocols.
Segwit2x Hard Fork: United We Stand, Divided We Fall
For this implementation to take place without a hard fork occurring would mean that 100% of all the mining power within the Bitcoin network would implement the change and run the new software. If any number of Bitcoin miners, with even on minimal amount of mining power, decide not to implement the new software and continue running the old software, you get the creation of a separate Blockchain in which is an exact clone of the original. At the moment where there split, they now become two separate Blockchains with the exact same histories.
Since Bitcoin is an open source project, it means that anyone who knows how to write programming languages can suggest changes, upgrades or ideas to improve or radically change how the software works. Obviously, if the changes being proposed are whimsical or not feasible, the community simply ignores them, and the changes will never take effect. The same thing that makes Bitcoin able to function as a decentralized cryptocurrency so successfully is the same thing that upholds the business practices from a software perspective.
However, every once in a while, someone who has some clout or that has an idea, that a good portion of the Bitcoin community agrees would be beneficial, comes a long and there is enough support that the changes are seriously considered. This usually involves a whole lot of bickering, arguing, debating, discussion, etc.… culminating in some sort of agreement and then the code is either implemented or thrown out. When the bickering does not stop, the debating does not get anywhere, and all discussions end with two sides still unwilling to come to some sort of an agreement, you get a hard fork. This is the case with the Segwit2x hard fork. There are two sides; those for Segwit2x and those opposed to it.
Segwit2x Hard Fork Pros and Cons
Segwit2x is a software upgrade that will change the size of the data blocks from their current limit of 1MB and increase it to 2MB, thereby doubling it and allowing up to double the transactions to be processed in a single block, hence the “2x”. Unlike Bitcoin Cash and Bitcoin Gold, both of which were always intended to create a new cryptocurrency and brand-new network, Segwit2x is aiming to keep bitcoin the same, all on one network, with increased block sizes. They do not wish to create a new cryptocurrency, but rather, upgrade the current one to better serve its users.
At the time it was proposed, three possible outcomes became available, and still remain the same as of today:
- 100% of the mining power (or close enough to it) agrees and adopts the new software. Bitcoin continues on, nobody really notices anything accept lower transaction fees and faster confirmation times due to the extra room in each block.
- A significant number of the total mining power decides to reject the software upgrade and continue running the old software, thus creating two separate blockchains and two separate cryptocurrencies.
- 100% of the total mining power (or close enough to it) decides to reject the new software and no changes are made at all.
Drama from Start ’til End of the Segwit2x Hard Fork
It became apparent, within the first 72 hours after the proposal was put forth that option ‘C’ above was no longer an option. There was major support from the very beginning. However, option ‘B’ above did not get taken out of the equation because there was major opposition to it from the very beginning, as well. As time has moved forward and the day of reckoning has drawn closer and closer, it appears that option ‘A’ is now out of the game, leaving option ‘B’: 2 blockchains and 2 cryptocurrencies.
As it stands now, it appears that we will have two separate cryptocurrency coins as at least 2 major mining pools, representing 17% of the total mining power of Bitcoin on the network has decided not to implement changes. And furthermore, even the major mining pools that have agree to implement the changes have only agree to implement the changes by offering Segwit2x as a choice to their miners, leaving the ultimate decision on which software to run up to the individual miner. So, in all reality, we may see as much as 25 to 30% realistically, who choose to not implement the new software.
Why is everyone so split on the Segwit2x Hard Fork?
There are actually 3 camps in this debate:
- Supporters of the Segwit2x Software Upgrade
- Protesters of the Segwit2x Software Upgrade
- Opportunists looking to capitalize on the situation, no matter who wins.
The major support of the Segwit2x hard fork comes from those who would profit the most by increasing the block sizes:
- Bitcoin Miners who receive rewards for their mining operations. (not all miners are supporters)
- Startups and other businesses who make a profit by providing bitcoin related services to their users.
Those who support the Segwit2x upgrade argue that Bitcoin should be treated as digital money, and therefore, it should compete with the US Dollar for supremacy in the financial world and Forex markets. They also note that Bitcoin’s lack of transaction block size is allowing other digital currencies to gain traction and will eventually outpace Bitcoin because of it. They also say that other ideas, such as the August code implementation, is just not bringing the upgrades needed and feel that they need something new and they need it now.
The major protestors of Segwit2x include:
- Bitcoin Core developers. The people who have worked on Bitcoin the longest, on a volunteer basis because of the ideals for which it stands.
- Node operators, who host the entire Bitcoin transaction history on their computers, allowing the network to function in a way that allows it to be so great. They argue that increased block size means increased storage capacity that they will need to pay for.
Those who are protesting the Segwit2x hard fork say that Bitcoin is not a digital currency, was not designed to be a digital currency and should not be treated as such. They say that technological advances would see Bitcoin as a digital currency in the near future, but it is not ready for that status yet. They call it a “Store of value”. They also fear that if this implementation should fail and Bitcoin should possibly “Break”, that it would cause a sharp decline in interest, undermining the entire project, as a whole. Finally, and the biggest concern is that the Segwit2x hard fork will give miners and businesses too much power over Bitcoin, which goes against the very concepts that Satoshi Nakamoto envisioned when creating Bitcoin.
The Opportunists: The Good, the Bad and the Ugly
First, something that is important to note: Opportunists are not necessarily bad people. In fact, reading this article, and the many more that have been written on the subject is a good example of opportunists who are not necessarily “Bad” for profiting from the situation. I am referring to myself and the other journalists, authors, bloggers, etc.… who write about the topic. The writing is not being done for free, meaning that the situation has created an opportunity. While personally, authors may be supporters or protestors of the Segwit2x hard fork, in most situations, you wouldn’t be able to tell just by reading their articles on the subject. This article is meant to give the reader information in an understandable way so that they may decide on their own which side they support and in no way, should my personal views sway you; rather, the information you receive should allow you to make a decision, or at the very least, help you to understand the situation so that you can find the additional information you need to come to your own conclusion.
Other opportunists include day-traders and market-makers. The price of Bitcoin surges before hard forks traditionally, and this upcoming Segwit2x hard fork has seen bitcoin hit new all-time highs and looks to see even more before the day of reckoning arrives. The situation has caused an opportunity for those in the currency trading industry.
There Are Always Some Bad Apples
Those are two examples of “Not Bad” opportunists. Of course, the world being the way that it is, unfortunately there are those who seek to maliciously scam or con people and are willing to use any excuse they can to achieve this goal. An opportunity to do this when it involves currency, Bitcoin to be exact is prime time for these types of opportunists. They may use fear of the upcoming hard fork, or even the greatness that it will bring to lure people into their various traps and pitfalls.
The one thing that all opportunists have in common is that whether they Are a supporter or protestor, whichever side wins in the end, it will not affect them in any way, when it comes to the opportunity it created. Either way, I have articles and news pieces to write, day-traders are doing quite well and the scammers… well, they are unfortunately probably doing better than anybody.
Segwit2x Hard Fork: There Came a Peace Treaty and an Agreement Was Signed
After heated arguing, name calling and even several hacking attempts, an agreement was finally reached. Called the “New York Agreement”, it was an agreement reached by a significant group of international Bitcoin companies and released in May 2017, just prior to the “Consensus 2017” conference in New York City.
The two opposing sides came to the table. They agreed to adopt the Bitcoin Core original idea, called Segregated Witness, or SegWit for short. The compromise was that the opposing side would get their increased block size 3 months later. Everything went off without a hitch. The only issue was that Bitcoin Core was not a part of this agreement. SegWit may have been the idea of one of bitcoin Core’s developers, but it was those who supported SegWit that finally came to an agreement with those who opposed it. And in exchange, they gave up something that Bitcoin Core had always, traditionally, rejected: a hard fork.
Who? What? Where? When? I am So Confused About the Segwit2x Hard Fork!
At first, Miners from the major mining pools began signaling their acceptance of the New York Agreement. 95% of miners (View the Charts) signaled that they would agree to it and adopt the new software. It seemed as if the bickering, the division and the uncertainty within the Bitcoin community had finally come to an end. Of course, many people, for reasons still not totally known (Whether it was deliberate misinformation, or just assumptions made is debatable.), assumed that Bitcoin Core was involved and on-board. They were not.
The length of time that it took for it to become clear that Bitcoin core was not on-board and totally against SegWit2x is somewhat disturbing. It is disturbing not because of Bitcoin Core’s lack of enthusiasm for standing against Segwit2x, which is the way it appeared, but rather it was the fact that the people who support Segwit2x went to great lengths to confuse the general public about Segwit2x, what it meant, what it would do and even spent a good deal of time convincing people it was not an option, but a requirement; a simple software upgrade. 1 The most telling of these confusion tactics is the name: Segwit2x; What average, everyday person would not assume that Segwit2x was directly related to SegWit? Hell, what tech savvy person who has daily business dealings in cryptocurrencies would not assume the same thing. Yet, there is no relationship between SegWit and Segwit2x.
Well Respected & Trusted Isn’t So Trustworthy
In August, BitPay, a leader in bitcoin innovation lost most of the reputation that they had built up with one single blog post that urged users to upgrade their software to ensure they wouldn’t lose their bitcoin. The only issue is that they told their users to upgrade to the Segwit2x software without ever telling them that it was different from Bitcoin. The community was not pleased at all, as was apparent in thousands of social media threads, one of which you can read here. This prompted Bitcoin.org to remove BitPay from their website. It also caused Jeff Garzik, the developer responsible for Segwit2x to be permanently expelled from the bitcoin Repositories on GitHub.
Segwit2x Hard Fork Takes a Hard Uppercut to The Jaw
The biggest and most impactful blow to the ”Peace” came from Bitcoin Core themselves. On October 5, 2017 (5 October 2017), Bitcoin.org, the core development team responsible for maintaining Bitcoin as we know it, officially denounced the Segwit2x hard fork. While they never even hinted at support for Segwit2x, and even had previously stated they were against it, it never seemed anything more than a “Policy” decision. The feelings were that Bitcoin Core was just being Bitcoin Core. That is until they began informing Bitcoin users that their bitcoin would not work with a lot of companies; and then they named the companies one-by-one. (Read the full article on bitcoin.org).
Bitcoin Core Won’t Give Up Bitcoin Just Yet
While Bitcoin.org clearly is against the contentious hard fork attempt they consider it more than tolerable for any website, exchange or other company to support the S2X coin as long as it doesn’t contradict their rules involving the relationship with Bitcoin. They officially announced, via their website, that they would not tolerate any business that chose to support the hard fork and the current Bitcoin network as one.
While they denounced the hard fork, and maintain that Bitcoin should remain the same as it is today, they do say that they have no problems with businesses which choose to support the new token and will therefore support any company who chooses to the Segwit2x token, as long as there is no misrepresentation towards the customer and that Bitcoin and the new token created are treated as separate cryptocurrencies.
Calling the Bluff: Oh No! They Weren’t Bluffing!
On October 11, 2017, as promised, bitcoin.org listed companies, one-by-one that did not meet the rules which they had laid out. Bitcoin users were told that companies, such as Coinbase, BitPay and Purse, along with 47 other Bitcoin related enterprises, most with recognizable names, should be avoided as the user would most likely lose their Bitcoin due to an incompatibility.
Bitcoin Core’s Show of Strength is Enough to Change Some Minds
This got the attention of, well, Everybody. Within 3 days, Miners, who had been signaling to show that 94%-95% would support the New York agreement began changing their minds. On October 22nd, the number of miners signaling acceptance DROPPED FROM 94.3% TO 85.6%. That number has come down even farther, and as of today, November 7, 2017, there are currently only 83.48% that are signaling acceptance of the SegWit2x Hard Fork.
Since the companies were listed publicly on Bitcoin.org, most have adhered to the rules laid out by Bitcoin Core. Bitcoin Core proved in a huge way that they are not ancient dinosaurs, who can be ignored, but rather the people Bitcoin users still listen to and trust. Plus, it sure doesn’t hurt that bitcoin core holds a share of 7,930 of the 12,400 nodes on the network. At the time of writing, BTC1 (Segwit2x) nodes numbered 1,953. Bitcoin Core holds 63.95% of nodes compared to only 15.75% for Segwit2x. 2
Heading Down to the Wire of the Segwit2x Hard Fork
The last few days leading up to the Segwit2x hard fork will be interesting, to say the very least. Of course, it should be noted that a miner signaling support only means that they are sending a message to the world that say they will support it or they do not send a message. It does not cement them into any kind of binding agreement and in the end, those who signaled yes, may choose not to run the Segwit2x software and those that did not signal at all may choose to actually run it. Only the confirmation of block 494,784 will allow us to know anything more than mere speculation at this time.
As Segwit2x Hard Fork Day Approaches, Bitcoin Prices Surge
A good signal of the confusion regarding the segwit2x hard fork can be seen on the cryptocurrency markets, where Bitcoin has surpassed previously held records for the highest value in the digital currencies relatively young life. Not only has the value risen, but Bitcoin has had a steady increase in market capitalization, or total amount of money being transacted on the open market. That trend does not seem to be ending anytime too soon either. Bitcoin looks to find the $8,000 range sooner, rather than later and will potentially hold there for a bit. 3
Over the past weekend, Bitcoin peaked at $7,525.72, the price slid back down to a modest $7,268.26. market volume also dropped from $3.6 billion to $2.3 Billion from Friday until today. 4
Free Money is the Best Gimmick in the Advertising World
The reason for the surge is mainly due to the expectation that when the Hardfork occurs, users will receive “Free Money”, in the form of the new Segwit2x token. Add on top of that, the news that Bitfinex ran some testing on their platform with a “hypothetical” Segwit2x coin to determine possible trading values and it tested out to just around $1,000, almost double the price of Bitcoin cash and 6 times the price of Bitcoin Gold. The same type of price surges and increases were seen before both the Bitcoin cash and Bitcoin gold hard forks, so it is not surprising to see the same type of activity occurring prior to the upcoming Segwit2x hard fork. It is whether or not Bitcoin will be able to maintain those prices after the hard fork, which becomes the major concern for many.
Another worry that markets have is what will happen if there is any confusion over which blockchain is the true Bitcoin. The ensuing panic could see the Bitcoin markets crash; fast and hard. This is why most, if not all, bitcoin wallet services, exchange platforms and other services that provide bitcoin services in one way or another will be shutting down deposits, withdrawals and trading shortly before the hard fork occurs until a time afterwards when they are certain that everything is stable. For them, it protects against a possible panic, or worse; a market crash so fast and hard that bitcoin can never fully recover.
Segwit2x Hard Fork Risks Versus Rewards: Weighing Your Options
For users it is a risk, as well as a potential win-fall. On one hand, your Bitcoin will be stuck until a time when the service in question feels it is safe enough to resume providing their services. While the possibility is very slim, it is possible that when you can once again access your Bitcoin, it may not be worth anything at all, nor will the new Segwit2x bitcoin. The possible win-fall is that the price of Bitcoin is not affected in any negative ways, and then the Segwit2x token has value and now you have both. The risk appears to be worth it, as it is not even being suggested in any serious mediums, that any sort of failure is expected to occur.
Then again, if it were expected then most likely, there would be plans in place. It is always the unexpected things in life that really pack a punch when they happen. That being said, the best course of action is left to the individual user, their stress tolerance, faith in bitcoin and the community. It is definitely advisable to not keep all of your financial assets stored as Bitcoin. This just seems like good, old fashioned, common sense to me, but it is something that everyone should consider.
Segwit2x Hard Fork brings the Same Old Warnings and Safety Precautions
Just as with the last two forks, this one should be treated no differently. If you wish to truly secure your Bitcoin and have full access to the new Segwit2x digital token, move your Bitcoin to an offline paper wallet, where you control the private keys solely and 100%. It may take some time for the online exchanges and wallet services to support the new token, although it appears that the major players are all set and ready for game day.
One thing that can be stated with confidence is that the Segwit2x hard fork will not have the same results as the Bitcoin cash or Bitcoin Gold hard forks. Wallets and exchanges will not be able to wait until they feel the new token is secure, safe, etc.… With a majority of the hashing power on the network seemingly going to Segwit2x, they will need to be able to offer support from the moment the hard fork occurs. This does not mean there will not be downtime. Most, if not all will suspend their services nonetheless.
Major Exchanges Stance and Plans for the Segwit2x Hard Fork
Notably, the following companies did not sign the New York Agreement, and therefore have no obligation to run the Segwit2x software as most have openly denounced the Segwit2x hard fork: Poloniex, BitStamp, Bithumb, Kraken, and Gemini. Users that need information from these sites should visit the site and search within the support section or blog/press release section for more information regarding the upcoming Segwit2x hard fork. It is advisable to move your Bitcoin to a different account which is supporting Segwit2x until after the hard fork is complete.
Coinbase is supporting the Segwit2x hard fork, and is going to be referring to the new currency as a separate digital token from bitcoin. To determine which blockchain is Bitcoin, they will wait until both are stable after the fork and at that time, the blockchain with the most accumulated difficulty, along with community consensus and market cap will be named bitcoin. All users with Bitcoin stored in their Coinbase wallet, will be credited with Segwit2x (B2X) tokens automatically. Users do not need to take any actions on their part.
Bitfinex will be supporting Segwit2x and users will receive an equal amount of B2X as they hold in bitcoins at the time of the fork. Bitfinex has stated that the incumbent digital token, which would be the original Bitcoin, will continue to be the original Bitcoin, even if B2X has more hashing power. Bitfinex will halt all trading, deposits and withdrawals at the time of the hard fork and those services will remain unavailable until Bitfinex can secure their user’s funds. They plan to “taint” their customers bitcoin to ensure that no replay attacks can occur, citing the lack of reliable replay attack protection in Segwit2x. Bitfinex has made it clear that the process will take a minimum of 24 hours and they are expecting it to actually be a much longer time frame. Updates can be found on their site here.
Poloniex has remained eerily silent regarding Segwit2x. It is important to note that Poloniex DID NOT SIGN The New York Agreement, and therefore has no obligation to run the software at all. Users seeking to benefit from the dual currency distribution would be best off by moving their Bitcoin out of their Poloniex accounts until after the Segwit2x hard fork is over. Based on prior press releases from Poloniex themselves, they make the same suggestion as they state they will not jump into anything without ensuring the safety of their users and their user’s funds.
Bittrex has stated, in a news post on their website, that they did not sign the New York Agreement and intend to remain neutral, placing the safety of their users first. They cite that there will be significant delays in Bitcoin deposits and withdrawals following the Segwit2x hard fork so that they can ensure that their user’s funds are secure. They will monitor the situation for 24 to 48 hours after the hard fork to determine the stability of the blockchains and determine which is the true Bitcoin.
BitStamp, another exchange that did not sign the New York Agreement, has remained silent on the Segwit2x situation. Users are encouraged to check with their news page to get information as it is released but prudence would dictate that bitcoin balances be moved off of BitStamp if you wish to get the equivalent amount of B2X coins.
Wex (BTC-e) has outright declared that they will not support Segwit2x, no trading pairs will be listed on their exchange and that their normal, everyday functions will continue through the Segwit2x hard fork, uninterrupted. They feel that this contentious hard fork attempt undermines Bitcoin and refuse to even acknowledge it.
Every exchange and wallet service will have its own policies and procedures regarding the upcoming Segwit2x hard fork, the digital coin that may be produced from it and how they will handle the situation in general. Again, the only way to ensure that your Bitcoins are truly safe and that you will receive an equal amount of any newly created coin is to move your Bitcoin to a wallet where you have 100% control of your private keys.
The information above is meant to help you draw your own conclusions regarding the upcoming Segwit2x hard fork, which is slated to occur with the creation of block 494,784 on or about November 16, 2017. It appears more than likely; a new digital currency will be created a s a result of the Bitcoin blockchain being split into two opposing blockchains; both with the same transaction history.
Whether or not you are a supporter or protestor of Segwit2x, the important thing to remember is that your money must be secured in a place where you feel it is safe. Whether that be a trusted third-party service, such as a wallet or exchange or a cold storage wallet is totally up to the individual user. The date of the Segwit2x hard fork is approaching. Be prepared. Be ready. Be vigilant.
Editorialized Writing About the Segwit2x Hard Fork
The content below is a speculative editorial that focuses on some key points of the current state of support that is being received by Segwit2x via the miner signaling of support for the software implementation. The information provided is in no way meant to be taken as fact, advice, or as being true. It is simply an opinion and does not even necessarily reflect the full views and beliefs that I hold. It is simply something that seems obvious to occur. As always, your comments below are welcomed and please point out any corrections where things have been wrongly stated or taken out of context.
The Elephant in the Room is Being Ignored but is Significant
It seems that the Segwit2x supporters would rather not discuss the fact that they lost a significant number of miners that were signaling their intent to run the Segwit2x software. While a drop from 95% down to 83% does not seem significant, and makes it appear that Segwit2x is still the definite victor in this God-forsaken war of cry-babies, it has actually done quite the opposite. It causes more uncertainty and doubt in the eyes of everyone involved, mainly the miners who are still signaling their intent. The possibility that even more miners will get cold feet as the Segwit2x hard fork approaches is pretty much a guarantee. The reasons are not obvious, and it takes a bit of understanding of the nature of business, mixed with a dash of technological know-how and a small pinch of economics to fully understand how a mere 10.1% decline in miner commitment could spell disaster for Segwit2x.
Disaster May Be on The Horizon for Segwit2x
When 94.3% of all Bitcoin miners in the world were signaling that they intended to agree to the terms laid out in The New York Agreement, thereby agreeing to run the Segwit2x software at the time of the hard fork, even though it was not 100%, Segwit2x had reason to celebrate. The reason is quite simple when you look at it from a perspective anyone who is not a miner would have no reason to view. If you are one of the 5.7% who are not signaling your intent and are not on board with Segwit2x, when the Segwit2x hard fork occurs, and you are left on the blockchain that is now producing a coin that nobody gives any value to, how will you make your money now? Well, you could go get a job at McDonald’s or maybe grab a local newspaper to hit up the “Help Wanted” ads. Monster.com and CareerBuilder.com may be a viable option, as well.
Or, you could simply bite the bullet, as we Americans say, and install a new piece of software and continue making decent money mining a digital currency. While I would like to think that the world is full of people who stand by what they believe and never back down, I have to be brutally honest here: 9 out of 10 of those miners are installing the new software and joining the enemy ranks. If for no other reason than to continue to pay their bills, feed their families or simply survive financially.
Segwit2x Hard Fork: The Majority Rules
In the end, they are not wrong. While the new code being implemented is not part of Satoshi’s original vision, per say, the fact that it was implemented democratically follows right along with the core tenets of Bitcoin. And let’s face it, in order for Segwit2x to work, it will take a majority of the hashing power. Just as we accept our elected officials, even if we voted for the “other guy/gal”, the opposing miners would eventually install Segwit2x and that would be that. Celebration at Jeff Garzik’s house!
But hold on Jeff, don’t go buying the party hats just yet. The scenario above is not one that is an epiphany, surprise or even remotely new to anyone who is mining Bitcoin. Now that there are around 16% of miners not signaling for Segwit2x, those who may have signaled just to avoid missing any income will begin to withdraw support, as well. Bitcoin does not need 100% of the current mining power to continue on as a digital currency. In fact, it will not even take a hit and will remain the highest valued currency in the world with the 16% support is currently showing. The reason is simple:
Bitcoin Mining Has No Short Supply of Applicants
There are a million people who are just waiting for a chance to mine Bitcoin waiting in the wings for an opportunity. Maybe they haven’t been able to afford expensive ASIC’s, or have not been able to buy a mining contract due to financial limitations. Well, this is a world of supply and demand. What do you think will happen if the above scenario holds true in 9 short days?
If you answered that the government of your country will give everyone free bitcoin mining gear, you would have been wrong. However, if you answered that mining pools, ASIC manufacturers, dealers and other mining focused companies that were remaining with the original bitcoin protocols would almost immediately drastically lower prices for access, you would be absolutely correct.
Currently, Bitcoin has Nothing to Fear
If bitcoin core and the original protocols can keep the current number of miners supporting them through the Segwit2x hard fork, which appears to be a given, then bitcoin will not even notice the very short gap in computational power. And the gap WILL be short. Because the downside for Segwit2x, in add to their already seemingly run of bad luck is that their new cryptocurrency coin, with its 2mb blocks will not be worth that much. And that means all of those miners who do upgrade will learn how to downgrade really quick and come running right back to bitcoin, begging for forgiveness. That is, if they want to keep making money.
Segwit2x Hard Fork: Same Old Song & Dance, Again
While the date may have changed, the actors have all new faces and the details slightly different, the story is the same: a new, cocky kid comes around claiming to be the next best thing and for a while he holds true to his word and convinces the world that he is better, stronger and more capable than his rival. There have been others, in the recent past who have said that their digital coin was the next Bitcoin. Not once, not twice, but three times. And each time, the promising coin looks like it has the right stuff, convinces the masses it is the right stuff and in the end, where are Zcash, Monero and Ethereum? They are doing well enough, all three with large networks, viable currencies and most importantly: all three, looking up, way up, to Bitcoin. Make room guys, got a new kid coming to join you real soon.
Know more than others on any Blockchain Party!
Join more than 5000 others to receive the breaking news and weekly summaries! No ICO spam, we promise.