Hard Fork Coming Soon
The current Bitcoin scaling plan implemented on 5/23/17 with Bip 91 named Segwit2x or NYA is coming to its 2nds stage which is a hard fork. Segwit2X reflects the 2 components of the agreement which was a compromise between the two competing scaling solutions for Bitcoin. The two components of there agreement are:
- Big Blockers who support Satoshi’s original scaling solution would signal and accept the Segwit soft-fork. Which would enable segwit transactions and future off-chain scaling solutions through that technology.
- Segwit Supporters would agree to a modest hard fork which would increase the block size from 1mb to 2mb within 6 months after the proposal locked in.
The agreement was accepted and enforced by Bitcoin miners and is now nearing the hard fork point (estimated to happen around November 16th). However, Blockstream aka Bitcoin Core, The largest and most prominent Bitcoin development team has refused to integrate the Segwit2x scaling solution into their software. Leading them and their followers, a relatively large outspoken portion of the Bitcoin community, to voice opposition and completely oppose the 2nd half of the agreement (the part of the compromise they originally opposed). This disagreement has gained significant momentum and 1 major mining pool have even gone so far to back out of the Segwit2x agreement, signaling they will mine the legacy chain not the Segwit2x chain.
2 Surviving Chains likely
Because of Blockstream’s strong opposition to the Segwit2x agreement, and signaled real miner support, it is likely that the scheduled hard fork this November will result in 2 separate surviving chains of Bitcoin. Bitcoin (the current agreed upon software with Segwit2x), and Cores competing fork which refuses to raise the block size.
In a normal agreed upon hard fork, miners and nodes move onto the new chain at an agreed upon point referred to as a fork. Leaving the old legacy chain to die. However, when there is enough disagreement and enough people mine and carry on the legacy chain, 2 separate currencies emerge. Like what happened with Bitcoin Cash and Ethereum Classic. However, in this case it is less likely both chains survive with the same proof of work algorithm and long difficulty adjustments...but its not impossible.
Btcpop openly expresses its views on Segwit2X, but will always remain committed to competition and the free market. So both chains will always be safely managed and allocated to users ASAP.
Upcoming Fork Game plan:
- Deposits and Withdrawals will be disabled shortly before the fork.
- Late fee Cron will be disabled: (meaning all payments due will not be charged late fees or marked late)
- The network will be monitored closely and the chain with the most miner support will be Bitcoin.
- Once Btcpop determines that the Bitcoin network has stabilized, and we are confident that all customer funds have been fully protected from transaction replay, we will reopen Bitcoin deposits and withdrawals.
- The minority chain will be listed as an altcoin on Btcpop’s exchange and credited for all Bitcoin in primary wallet, instant pool, open buy orders, and funding loan/bonds.
- Btcpop will then enable trading, deposit, and withdrawals for the minority chain as soon as it is confident the network is secure and all funds have been fully protected from transaction replay.
Further Digging into the Scaling Debate
“Even the best-laid plans of mice and men often go awry”- Robert Burns
Nakamoto Satoshi’s whitepaper “Bitcoin: A Peer-to-Peer Electronic Cash System” has already changed the world in a dramatic way unleashing the innovation of the blockchain and the freedom of free economically sound cryptography based money. However, his creation (Bitcoin) lies at a crossroads. Confirming even the great Satoshi’s well laid plans, can still go awry.
Bitcoin, Without Functional Scaling, is Broken
In which he summarizes that the Bitcoin experiment has failed. In short failure was because the community failed.and fundamentals of Bitcoin are broken. Making it no longer the superior payment system it used to be.
Because of the scaling debate:
- The community is in open civil war and fighting instead of working together
- Opposing views and proposals to Core are censored and attacked. (Bitcoin XT for example)
- Bitcoin transactions fees are wildly unpredictable and trending upwards
- Payments have become flaky as even historically extremely high $1+ transaction fees can be stuck in backlogs for days
- Buyers can now take back payments after walking out of shops (a new bitcoin feature added by Blockstream Core)
Satoshi’s Best Laid Plans
The Blocksize limit was put in place as a temporary security measure as the network was growing. You can read the discussion in this Bitcointalk thread. This limit was never meant to be reached and Satoshi proposed a very simple solution of raising blocksize in the thread well before the limit was reached in order to avoid costly transaction fees.
Opposition to this plan
The opposition to this simple scaling solution stems from a technological trade off. The larger the block size the more space it takes to store all transactions and run a full node. However, Satoshi never planned for everyone to run a full node as you can read in some of these quotes. He never envisioned more than 100k full nodes as lightweight nodes work better than full for users, and he states that “only those making blocks really need to run a full node”.
Another argument against large block sizes is the increased time it would take for them to move across the network. But, understanding technological advance Satoshi again foresaw this problem and simply stated “If the network were to get that big, it would take several years, and by then, sending 2 HD movies over the Internet would probably not seem like a big deal.”. We all know today sending 2 HD movies over the internet is in fact not a big deal.
How they went Awry
Michael Hearn was accurate in his description of what went wrong in the Bitcoin experiment.
Gregrory Maxwell one of the 4 people granted access to Bitcoin by Hearn didn’t agree with Satoshi’s scaling plans. “Instead, Maxwell concluded, Bitcoin should become a sort of settlement layer for some vaguely defined, as yet uncreated non-blockchain based system.” He then went on to share his ideal and bring like minded developers onto the core team. Opposing voices choosing the path of least resistance chose to kick the block size can down the road instead of fighting it back when it wasn’t actually a problem.
And now we are here today. The block size issue is a real problem and severely hurts the Bitcoin user experience. And the debate has gone political, as collective debates tend to go. And just like in government politic, the process of debating is messy, unproductive, and often harmful to the community as a whole.
Free Market Consensus is Messy
Kings making rules is the most efficient and clean decision making process, but also the least free. People voting for kings to make rules, as we have discovered with politics and democracy, is much messier but more free. And people making decisions in a decentralized network like bitcoin is a complete mess, but it is the most free. Decentralization is new to us, and we obviously haven’t completely figured it out yet. But the end goal is freedom, and luckily the decider of this Bitcoin decision will be the free market and profits. Because end of the day, Bitcoin miners will mine the chain that is they feel is or will be the most profitable to them. And the most profitable chain in the long term is the chain the provides the most overall benefit to humanity.
Bitcoin can easily be fixed, but time matters. The longer Bitcoin is broken, the less users it helps, the less market share it gains, the less valuable the project becomes as a whole.
Btcpop’s Mission and Business Continues Regardless of Outcome
So however it turns out with Bitcoin1x, Bitcoin2x, or even Bitcoin Cash becoming the longest most powerful chain and earning the name of Bitcoin. Btcpop stands for the ideal of freedom. Free people, Free money, and the Free market. Btcpop will remain dedicated to creating a usable platform and providing value to its users under that ideal regardless of currency. Btcpop remains optimistic that a stronger Bitcoin will emerge from this controversy, but is already prepared and working on supporting loans in multiple different currency types should this debate permanently harm the Bitcoin Experiment.