Today, on November 16th, bitcoin’s software was supposed to undergo a fork known as SegWit2x, creating two competing version of the currency. Among an array over other disputes, his would have lead to disagreements over the “real” bitcoin.
The split was originally proposed due to disagreements between key stakeholders over how to update the core software that runs bitcoin. Permanent blockchain ledgers are created to record all bitcoin transactions. However, the split would mean that there is likely to be two bitcoin blockchains - one that uses 1MB blocks and one that uses 2 MB blocks. But which is the “real” bitcoin?
The problem with the split is the uncertainty about which version of bitcoin will prevail. If most miners support the proposed split it would likely make the big block version the official version of bitcoin. However, if the market continues to place more value on the original bitcoin, miners could change their minds and go back to the small version, making it more profitable.
There is further uncertainty over how long it will take to clear up. The sooner a winner emerges, the better, as a prolonged battle could only spread further confusion. There is worries over a lack of adequate technical measures and replay protection to ensure transactions on both chains don’t become muddled. Finally, there is speculation that some big miners will keep mining to impair the small version even if the big block version proves less profitable.
The fork was supposed to take place on November 16th at 5:42am - based on the number of blocks being added to the bitcoin blockchain and go into effect for block number 494784. However, on Wednesday, November 8th the leaders of the SegWit2X faction announced they would suspend their plan to split bitcoin. This was mainly due to a waning support, with an increasing pace and many influential signers backing out of the NYA on Wednesday morning, citing a lack of support in the community.
Thus, currently the split seems to be off the table with bitcoin continuing to work and exist as it has so far. However, it will be interesting to see how the market adjusts and the future of bitcoin continues to evolve.
- How do you think the abandonment of the split will affect the bitcoin market?
- What are some other uncertainties that might have contributed to the high fluctuations in bitcoin value before the cancellation?
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Anna, thanks for sharing this. This is obviously a super big topic that is going on right now. The split is self is a growing pains as bitcoin is trying to upgrade everything in general. It has affected the bitcoin market currently due to fear by investors but I believe it'll go back up and continue to go once the transition is more smooth and reliable. I think this could have other affects on platforms such as blockchain. The uncertainties have created fear for platforms such as Blockchain where they have told their customers to make a hold on transactions until the fork is completed
ReplyDeleteBitcoin and coin mining sounds like a terrible idea for me. As mentioned in one of your video coin mining is wasting environment energy. I think of this as one of the invention for good but turn out having terrible outcome. What will be the positive or negative outcome of having a currency, powerful enough to exchange good, not release by any country? economics people will this create price inflation?
ReplyDeleteIm glad they did not go through with the fork for bitcoin. I invested in about 5 months ago, but I am still attempting to learn what I invested in. I was worried that the bitcoin value could go down relative to itself, and I was not given any option on picking which side of the fork I would be on. I believe this would have split the investments and cause a run on whichever devalued first. I believe they still want to go through with a fork for the upgrade, but are looking into different options. I am also thinking about getting into mining it with processing power, but I am looking into the profitability as well
ReplyDeletehttp://fortune.com/2017/11/12/bitcoin-upheavel-segwit2x-fork/