Bitcoin SegWit2x Explained
The cryptocurrency world is waiting with bated breath for November 16 when the decision on the future of Bitcoin as a stable digital currency will be made.
In the midst of the issue is the software code SegWit2x (short for Segregation Witness 2x).
Let’s place the issue in perspective to make it simple for you to know what happened and what to expect:
Size of the Blocks Behind the Fork
After the concept had been established and Bitcoin began its journey as a virtual currency, the system was developed to allow coins to be mined and entered into the blockchain to earn rewards in the form of Bitcoins for the effort.
As the currency became popular, the space being occupied by the blocks (which used to be 1MB each) was reviewed. Parties agreed that it should be upped to 2MB so that the queueing time could be reduced.
But the old stream continued, and so came a proposal for the fork that is now approaching on November 16.
The fork has become essential to determine how the currency will operate in the future.
The question in everyone’s mind is: Which one will be declared or chosen as the real Bitcoin and what will be the fate of the other one?
Does the B2X Faction Have an Upper Hand?
While one may have to wait to learn the outcome of the fork, there are speculations galore on who will win and who will lose.
At stake is also the use of the ticker symbol BTC, which is already very popular and used extensively in Bitcoin exchanges and other trading platforms.
Those in-the-know claim that what should also be considered is the New York Agreement that was signed back in May 2017 in which most of the stakeholders participated, including those involved in mining of the cryptocurrency.
SegWit2x is the result of this agreement and those who claim that the B2X faction, which recommends the 2MB size of blocks for mining and uploading on the blockchain, might carry the day and be chosen as the real face of the currency.
As such, the others will have to become minor derivatives of the same.
What it Entails for the Currency and its Owners?
If, indeed, the SegWit2x faction wins the hard fork on November 16, then those who wish to engage in mining for Bitcoin in the future will have to use the upgraded software to be successful and earn more currency on their account.
This track may earn the ticker BTC1, and a majority of the holders of the currency will continue to hold and trade in Bitcoin as before.
The value of Bitcoin against the U.S. Dollar will also level itself out based on the normal factors that affect such currency valuations in the market.
Those holding Bitcoins in the other stream may continue to trade it with others holding the same stream of the currency.
It is also feasible the two sections will work out an amicable settlement where all forms will be converted and merged to continue in the interest of Bitcoin’s future as the most preferred cryptocurrency.
There are other alternatives available in the market, and the Bitcoin owners may not want any of them to gain in currency (pun intended).
Different Stakeholders Form Different Interest Groups
Within the cryptocurrency ecosystem, there are several interest groups involved in the future of Bitcoin—There are the miners, the developers, the node operators, those owning the Bitcoin exchanges, and so on.
Each may have their own interests, rightly or wrongly.
There are arguments being advanced by these groups to their own advantage.
Referring to the New York Agreement of May 2017, for example, a huge number of factions within the mining community may constitute over 80 percent of the miners.
This is one reason why the SegWit2x proponents are confident they will succeed in the hard fork.
Whatever happens with the hard fork on November 16, or whenever the specific block 494,784 comes up, the value of Bitcoin as a futuristic currency will be reviewed and discussed in the weeks to come.
The currency has already spread far and wide across many countries and businesses.
With SegWit2x expected to take over the code for mining of Bitcoin, larger sized blocks may become the norm. Already, some Chinese stakeholders are pushing for 8MB blocks.
Note: The SegWit2x team has issued conflicting reports regarding the commencement of the hard fork on November 16.
A statement was released on November 8 to say that the fork had been cancelled, but the team came back on November 9 with a follow-up message saying the hard fork would be carried out regardless of any difficulties.
Stay tuned for future updates.