The developers of a controversial plan to increase the bandwidth of the Segwit2x bitcoin network are preparing to begin its implementation and change the size of the "mined" block in the bitcoin blockchain from 1 MB to 2 MB. If this initiative receives proper support from developers and miners, then this year there will be a second hard fork (a hard split of the blockchain that allows previously invalid blocks) of the Bitcoin network and another, already the third competing version of the popular Bitcoin cryptocurrency will appear.
The other day, Segwit2x developers confirmed the block number on which they plan to hard fork Bitcoin and start mining 2 MB blocks. In a recent Github post, one of the developers, Jeff Garzik, wrote that the Segwit2x hard fork activation will occur at block 494,784 in November 2017.
Note that the activation of Segwit2x will be preceded by the transition of traditional Bitcoin to improved Segregated Witness technology, or SegWit. This is a new way to record data in blockchain blocks, which, as we already wrote, will allow you to fit more transaction records into one block while maintaining its previous size (1 MB) and placing some of the information in an additional block. The transition should take place later this month (tentatively August 23). Note that the introduction of SegWit is a soft fork with a phased transition to the updated rules and without separating into a separate branch.
Work on Segwit2x was first announced in May. Among bitcoin enthusiasts, the document is known as the New York Agreement. It was signed by 58 companies from 22 countries, including Bitcoin.com, Bitmain, Coinbase. According to the authors of the document, these companies have 83% of the computing power of the entire bitcoin community. Participants agreed to switch to Segwit2x after the implementation of SegWit. The Bitcoin Core team is behind the development of Segwit2x.
As for the Bitcoin Cash cryptocurrency (BCH or BCC for short), launched on August 1, the creator of the protocol is Amory Sechet, a former Facebook programmer from San Francisco. The first version of the Bitcoin Cash protocol was called Bitcoin ABC. The plan to launch Bitcoin Cash was put into action with the participation of Bitmain, a company that provides about 20% of all computing in the Bitcoin network.
The feasibility of launching Segwit2x raises big questions, especially now that there is Bitcoin Cash with increased blocks. It is believed that the differences between the Bitcoin Cash and Segwit2x projects are more ideological than technical. In addition, with the adoption of SegWit on the Bitcoin blockchain, the block size will no longer determine the efficiency of the network. What fate awaits Segwit2x, only time will tell. Meanwhile, the Bitcoin Cash cryptocurrency, two weeks after the launch, fell a little in price ($300 is given for one coin), but its support and mining by users and companies continues. And the rate of ordinary bitcoin during this time has grown one and a half times - from $2800 to $4200.
Rate
Hello! Mike Belsh(CEO BitGO) on November 8 officially announced that the bitcoin scheduled for mid-November will not take place.
In his address, also signed by Wences Casares(Xapo), Jihan Wu(Bitmain) Jeff Garzik(Developer of Segwit2x), Peter Smith(Blockchain.info) and Eric Voorhees(ShapeShift), Mike Belsh wrote the following:
The Segwit2x initiative started in May with a simple goal: increase the block size and improve the scalability of the bitcoin network. The bitcoin community was in crisis at the time, after nearly three years of intense debate and a consensus for segwit that seemed like a dream come true with 30% support among miners. Segwit2x achieved its first success in August when it broke the deadlock and was quickly implemented segwit activation. Since then, the team has focused its efforts on the second phase of the project - increasing the block size. up to 2MB.
Our goal has always been a smooth upgrade of bitcoin. Although we strongly believe in the need to increase the block size, there is something else that we believe in more strongly: maintaining cohesion bitcoin community. Unfortunately, it is very clear that we have not been able to reach a sufficient consensus on increasing the block size. Further following this path would divide the bitcoin community, which would hinder the development of bitcoin in the future. This was never the goal of Segwit2x.
As blockchain fees rise, we believe that eventually the increase in network bandwidth will be inevitable. When this happens, we hope that the bitcoin community will join forces and direct them towards search for a solution, possibly with an increase in the block size. Until then, we are suspending our plans to increase the block size to 2MB.
We want thank everyone, who has made a constructive contribution to the development of Segwit2x, whether you were for or against. Your effort is what makes Bitcoin great. Bitcoin remains the largest form of money humanity has ever seen, and we still committed to protecting and strengthening our growth worldwide.
Mike Belshe, Wences Casares, Jihan Wu, Jeff Garzik, Peter Smith and Erik Voorhees.
Let me remind you that in May 2017 years, large cryptocurrency companies, including Abra, BitClub Network, Bitcoin.com, BitFury, BitGo, Bitmain, BitPay, Blockchain, Bloq, Circle, Xapo and others, signed the so-called New York Agreement, which concerned the activation of Segregated Witness and the subsequent increase in the block size to 2MB.
Among the signatures there was no agreement from the developers bitcoin core, which is traditionally considered the official client of the bitcoin network. This caused controversy in the Bitcoin community, some were in favor of the New York Agreement, others were against it. Such a divergence of opinion could lead to a split in the community, which could lead to the division of the bitcoin network.
The rejection of the Segwit2x hard fork means that in the long term, Bitcoin has every opportunity for a smooth and deliberate upgrade, which in turn should have a positive effect on the price of BTC.
After the news about the cancellation of the fork, the price of bitcoin almost reached $8,000, but then there was a rollback to $7,000. At the time of publication of the article, BTC is trading at 7077$ .
About the situation with the current fork of bitcoin - segwit2x, let me talk a little. What exactly will happen in mid-November 2017? Will all exchanges and users switch to the new btc1 wallet (it is it that is positioned as compatible with segwit2x technology) or will everyone together, including miners, say oh, we made a mistake, bitcoin core honeys, let's live together, etc.?
So, I think this is exactly what will happen - miners, all of a sudden, will not support the activation of the 2mb limit on the block size until the bitcoin core says so. For example, now the slush pool does this under a far-fetched pretext. Almost certainly, somewhere a couple of weeks before the start of the fork, just in time for the recalculation of the number of blocks to take place after that, or immediately after the launch of segwit in mid-September, the guys from bitcoin core will offer "well, just a great solution" to expand the limit by block, with terms somewhere in half a year, and everyone will have fun, with dancing and bread and salt, they will accept this new plan, and the bitcoin segwit2x fork will be unanimously released exactly according to the same plan as it happened with bitcoin cash. The exchanges will again launch trading behind closed doors, the rate will again be just wonderful, straight from everyone "outside" salivating will flow, and nothing to eat. And most importantly - this fork will be considered exactly the same useless and temporary, plus one to the huge army of alts doomed to oblivion.
What is Segregated Witness
And we will get the next 100 episodes of this "Santa Barbara", called "2mb block". And we will pay even more commission, but then, because the following will happen:
Segregated witness will already be activated for a month by this time, and the updated wallets will begin to diverge among users.
In short, these are transactions in a new format, thanks to which it is possible to take out part of the data outside the standard block of the old wallet in such a way that it understands this transaction as valid but incomprehensible, i.e. legacy customers will receive money, but the balance will show zero, but new wallets will store and process the old block and the additional one with the necessary information on the transaction correctly. This is such a clever way to increase the block size in terms of the number of transactions (about 2-2.5 times in an ideal situation) is compatible with old clients, even the opinion of the miners would not need to be asked (they can use the old version of the wallet without segwit support), although infrastructurally their support is all equally needed, otherwise they may be offended - maybe this happened.
Of course, universal happiness will not come immediately, until the clients are updated, it will take months. By the way, many popular wallets have prepared in advance, so the rest is up to mining pools and exchanges, they are the main providers of transactions, and the rest will follow them, because all the participants of the banquet keep their accounts on exchanges one way or another.
Well, cool, there will be a lot of transactions in the block, and their value will go down
The network will suddenly unload, the current 1mb + 3mb segwit block will be enough for a long time, half a year or even a year. During this time, the lightning network will finally be released, and for its part will add even more unloading of the blockchain from transactions. It's no joke, you just need to block some money from your side and from, for example, an exchange and / or a mining pool, and that's it, you are in a network of instant and ultra-fast transactions, occasionally release clearing transactions that equalize your balances between LN connections and that's it - hundreds and thousands of transactions in both directions, you need to send 1 satoshi - no problem. And what will be the low commissions, download, a dream, one and a half satoshi per transaction, half a satoshi per transaction, zero - if you are a member of some club, or some other body. Happiness and another "native"!
And as a result, everyone will forget about the problem of lack of space in the block
Not for long - a year or even three. And that will be the worst! The problem hasn't gone away! There is a block size limit and there are no sane tools to expand it! All that the miners and bitcoin core managed to offer the community is a one-time expansion to a constant using a hard fork, and segwit does not stand out much here! 2-8mb, it's all garbage! Everyone will get used to it. After all, the growth in the cost of a transaction in the blockchain will go as unnoticed as I described in the first article - the frog will cook slowly!
Let's discuss in detail the future fork of SegWit2X, and why it could kill Bitcoin.
Bitcoin or Altcoin
Everyone wants to be Bitcoin. Bitcoin has essentially become a household name. Bitcoin and the abbreviation are prestigious, everyone else is imitators.
- Bitcoin is the very first cryptocurrency.
- Bitcoin - reflects the situation of the entire cryptocurrency market, it grows - everyone grows, it falls - everyone falls.
- Bitcoin is traded on exchanges, it is a standard, all other cryptocurrencies are traded relative to it.
- Bitcoin - has the maximum popularity around the world. Often, when they say "Bitcoin" they mean "cryptocurrency", when they say "cryptocurrency" they mean "Bitcoin".
forks
Bitcoin is open source software. The Bitcoin code is hosted on Github.
According to the initial idea, each cryptocurrency user should have a complete copy of the blockchain (node / node) on their computer. Nodes communicate with each other, transmit data about all transactions and blocks in the network. For ordinary users, there is a special wallet program that will “raise” the node, allow you to receive / send Bitcoins (and, of course, maintain the network for other cryptocurrency users). The main wallet at the moment is Bitcoin Core. Unfortunately, now the entire Bitcoin blockchain takes up almost 150 GB, and not everyone can afford to store such an amount of information on a computer. There are "light" wallets that have a special server with a node, when installing this, the user does not download the blockchain (for example, Electrum).
Fork is a change in the source code of the cryptocurrency (). "Fork" - "fork" / "fork" in English, fork is an important feature of the Github repository. Any user can take and copy the Bitcoin code (make a fork), and then work with it and call it whatever they like.
In cryptocurrencies, there is a “soft” fork - a soft fork and a “hard” one - a hard fork. In the case of a soft fork, no software change is required. In the case of a hard fork, changes are made to the Bitcoin code in such a way that Bitcoin nodes need to be updated. Without an update, the old nodes will no longer understand the new ones, in other words, we will have two completely unconnected networks.
Usually, during a hard fork, miners agree with each other and start working in a new branch of the network, and the old branch dies off. However, there are exceptions, for example, on Ethereum (ETH) and (ETC) or a branch of Bitcoin Cash (BCH) from the main Bitcoin.
If miners decide to support both branches of the network after a fork, they figure out how to distinguish transactions from one network from another. This is very important, because after separation, the network registries are absolutely identical. If you had one coin before the network split, after the split you will have one coin in each of the branches. For example, Bitcoin Cash solved this problem by slightly modifying the transaction: they added a special mark that shows that the transaction is for the BCH ledger, and not for the BTC ledger. If there is no protection (marking), an attacker can copy your transaction in the first network and execute it in the second network. This mechanism is called the replay() attack.
bitcoin core
Bitcoin Core is the development team behind the core Bitcoin wallet. In fact, these are the people who have been running the project since 2011. Despite the fact that anyone can make changes to the code, there is an established backbone of the . Most programmers work for other organizations, so code development is slow and neat. Bitcoin Core is never in a hurry to make changes, everything is thoroughly tested, for example, the SegWit protocol, which was launched in August 2017, was developed back in 2015…
Core are artists, creators who create a high-quality and beautiful product. Unfortunately, it is difficult for us mere mortals to understand the beauty of their proposals. Remember, there was such a "History of one byte"? You could say it's about them. SegWit is a beautiful solution, not just increasing the block size.
Bitcoin Core - altruists? Not! The project is sponsored by: MIT Media Lab's Digital Currency Initiative, Blockstream, Chaincode Labs Inc., Ciphrex, BTCC. Most of these companies are founded by Core developers, so sponsorship is conditional.
Blockstream is often associated with Bitcoin Core. Blockstream is an organization founded by the master minds of the Core project. Blockstream is engaged in commercial developments based on blockchain technology. When the company raised funding in its Zero Funding Round, the underlying idea was that Blockstream would be to Bitcoin what Mozilla was to the Internet: a commercial entity that upholds the core values of the protocol (). Putting an equal sign between Bitcoin Core and Blockstream is wrong. If you look at the Bitcoin code, you will see that Blockstream members have only participated in 26.7% of edits over the past 2 years.
Segwit
- Activate the SegWit soft fork at block 481 824, tentatively August 23, 2017.
- Hardfork SegWit2X at block 494,784 in November 2017.
- Wallets supporting SegWit2X:
- Bitcoin Unlimited: https://www.bitcoinunlimited.info/
- Bitcoin Classic: https://bitcoinclassic.com/
BTC1
SegWit2X supporters copied the Bitcoin Core code repository and started developing their software called BTC1. At the head of BTC1 stood Jeff Garzik- former developer of Bitcoin Core (he became the former after he started working for miners and developing BTC1).
It is worth noting that there have already been 3 attempts to take away the main repository from Bitcoin Core, the following projects have tried to do this: Bitcoin-XT, Bitcoin Classic, Bitcoin Unlimited. Now BTC1 is trying to intercept the palm:
Unlike its predecessors, BTC1 did not call their project "Bitcoin-something-there", they are trying to keep the name Bitcoin! Of course, Bitcoin Core developers do not and will not have access to the BTC1 code.
Problem of choice
Tentatively, on November 20, 2017, at block 494,784, one of the most important events in the life of Bitcoin in its entire history should take place - the SegWit2X hard fork. Bitcoin will split into 2 separate branches. Each branch will claim the Bitcoin name and the BTC token (none of the branches will implement replay protection). One of the branches may quickly die off, or both may remain. The decisive factors in this struggle will be the power of the miners and the price of the coin in each of the branches.
Fork supporters: Most of the miners of the network and the largest companies in the blockchain sphere are signatories of the New York Agreement.
Fork Opponents: Bitcoin Core and ordinary Bitcoin users who sympathize with them. Many users on the Internet add a mark to their nicknames. Companies that do not support the fork are collected at http://nob2x.org/
On October 11, 2017, the official website of Bitcoin - bitcoin.org (registered by the father of Bitcoin Satoshi Nakamoto) will hang a banner on all its pages condemning companies that support SegWit2X: https://bitcoin.org/en/posts/denounce-segwit2x
Exchanges: Some exchanges have signed up to the New York Agreement, however, now many of them have decided not to interfere and give their users the opportunity to trade futures of future coins. Statements made by: Bitfinex, GDAX, Coinbase.
What will happen if SegWit2X happens
- Large block -> smaller transaction queue (mempool) -> transactions will be faster, transaction fees will be lower.
- Large block -> increase in the time of distribution of information over the network and increase in technical requirements for the maintenance of a Bitcoin node.
- Possible loss of faith in Bitcoin by users due to confusion.
- Miners become the "owners" of Bitcoin and decide its fate. Loss of Bitcoin decentralization, because big miners can be controlled by someone else, such as the state.
- The core development team of Bitcoin Core will stop dealing with Bitcoin.
Many thought that Bitcoin Core would "puff out" a little, understand and forgive, and return to the development of the Bitcoin code, but this is not so. For example, one of Core members Andrew Chow answers the question like this:
“Who will develop on the SegWit2X network if Core doesn’t move there?”
Answer:
“If SegWit2X is held, then most of the Bitoin Core developers will leave Bitcoin for good, because 2X support will mean that miners and companies can have absolute control over Bitcoin. Bitcoin will no longer be decentralized.”
What happens if SegWit2X fails
- Bitcoin remains decentralized. Users decide its fate, not miners.
- No backstage games! Even though the BTC1 code is open and there is an open discussion on Slack about the development of BTC1, in fact there is no discussion going on there. This suggests that either there is no discussion at all, or the coordination of code development is taking place on the sly.
- The Bitcoin Core team remains and continues to work on improving Bitcoin.
- Miners will not be able to fork whenever they want, because if they manage to hard fork once, they are unlikely to ask anyone for permission later.
- The Bitcoin name will be retained, which is likely to affect the growth of the price of the cryptocurrency. Investor confidence will increase.
- The miners will be put in their place, they remain the “maintenance staff” for the Bitcoin network, and not its owners.
Who has already "turned on the back"
Removed support for SegWit2X:
- f2pool pool (10% network hashrate) - https://twitter.com/f2pool_wangchun
- Slush Pool (5% network hashrate) -
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