Bitcoin’s runaway success (and doubtless its runaway price) has surprised even those who first developed it.
With the 1MB limit on each individual segment in the Bitcoin blockchain close to being reached, SegWit (Segregated Witness) was deployed to speed up transactions which had become frustratingly slow. This essentially split each block in two to maximise the efficiency of its data storage.
For many however, this represented an insufficiently significant step towards confronting the issues of space and storage which face Bitcoin in the long term. They proposed SegWit2x (also known as the New York Agreement) which would split the blocks and increase the storage limit to 2MB.
Whilst this can be seen as a more affirmative course of action, it also represents a ‘hard fork’ – a permanent divergence from the current blockchain to create a new one. The nodes running the old blockchain would need to be updated at potentially great expense.
Meanwhile a collective of major Bitcoin miners decided that this scaling issue was still not being adequately addressed and implemented a hard fork which saw the creation of Bitcoin Cash (BCH) along with an increase in block size to 8MB.
The Ongoing Debate
There are now two opposing camps in the debate, with the big players (mostly major miners and wealthy investors) in favour of another hard fork, whilst many others (including most if not all of Bitcoin’s core development team) opposed to the idea.
SegWit2x has been vigorously opposed with a large number of companies and individuals signing up to NOB2X to prevent its implementation. These opponents of SegWit2x advocate instead a move towards the lightning network which they contend better addresses the issues of scale and storage. This is still in the testing phase.
SegWit2x is due to be implemented in November and concerns have been voiced that smaller players could lose out. But for many, another hard fork is the only way forward if Bitcoin is going to keep its place at the top of the cryptocurrency tree. Speaking to Forbes in July, OB1 CEO Eric Hoffman said:
I don’t necessarily buy the market is rejecting the hard fork. The hard fork has gotten the connotation that it’s this horrible, awful thing that could ever happen. At some point in time, Bitcoin is going to have to hard fork.
What Should “Hodlers” Do?
If you hold Bitcoin in a hardware wallet or on your pc then you will get both of the coins in a result of a split. If, however, you hold them in wallet in an exchange like Coinbase, it is not that clear. The ex engineer from Coinbase, Charlie Lee came out with his view as to how Coinbase will treat the fork.
Whatever the consequences, the Bitcoin community needs to reach some sort of consensus on this issue. What happens in November will be very interesting to see.
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