- 08 Jul, 2018
Segregated witness (Segwit) is recent phenomenon gathered most attention in the current cryptocurrency market space. Segwit is basically an implementable proposal from bitcoin developers to scale up the bitcoin transactions capacity. The proposed changes are mostly with respect to network performance and design. Segwit2x seek to upgrade bitcoin by marking the time limits for increasing the bitcoin network’s block size from 1MB today to 2MB after three months post segwit activation. The number of transactions that network can process is limited in nature. It can process up to only 1 MB transactions per 10 minutes. Owing to this reason, the registration and verification of transactions take longer than usual time during heavy use with inflated fees per transaction. The increase in block size would increase the cost of setting up network nodes as the nodes would have to store entire copy of blockchain on the computer files.
There have been few other proposals suggesting to increase bitcoins block size. Some of them are Bitcoin Unlimited, Bitcoin XT, Bitcoin Classic. However, none of them have reached the required majority of support.
Segwit was launched earlier in November 2016 allowing users to run it on their systems. The mining pools were required to activate certain changes, but the miners were hesitant to comply for a variety of technical reasons. SegWit2x is recently deployed on and the period for its adoption starts on July 21 and the last day for determining necessary support will be August 1, 2017.
Segwit2x – Who’s for? and who’s against?
It seems that there are quite a few high profile and powerful businesses and individuals supporting this technological move. Most of the businesses are associated with investment and start up community. It also includes several largest mining pools and bitcoin start-ups such as Blockchain, Bitpay and Coinbase. It also has in the list some of the prominent developers such as Gavin Andresen, who has been a former lead maintainer of Bitcoin Core among others. Few businessmen such as Bitonic and Bitrated, most of the bitcoin core developers, node operators and bitcoin users do not support this proposal.
What can possibly happen?
SegWit2x outcomes will determine how many of the users will actually agree to the proposal. If the proposal is accepted by majority, the mining pools who supported this move will continue to comply with the activated segwit criteria. If the proposal is not accepted with majority by August 1, it may initiate a series of events leading to a network split into two competing bitcoin assets.
The network split is a what most bitcoin users are worried about. With necessary support, bitcoin will upgrade to efficient network and users will not experience any service interruptions. In the absence of required support, all the users might need to upgrade their software to support 2MB hard fork, where bitcoin could split into two competing assets dividing the existing user base. Bitcoin experts advice to avoid bitcoin transactions during the Aug 1 as there are chances of losing bitcoins in the midst of potential ramifications.