The world’s main crypto currency – Bitcoin stopped the fall, which lasted the last two weeks. The crypto currency increased 13.7% a day after the activation of the new Segwit2x protocol.
Bitcoin – the disputes around
In the coming months, there will be extremely interesting events that can significantly change both Bitcoin and crypto currencies in general. Will Bitcoin split into several platforms or, conversely, the crypto currency will remain unified.
There are disputes around the scenario of network scaling. In the Bitcoin system, there were initially restrictions on the number of transactions, which are limited by the size of the block with transactions. This is necessary in order to prevent hacker attacks and increase security. But, the popularity of the first crypto currency and the number of transactions gradually increased. Thus, processing speed began to fall and the cost of creation increased.
The solution to the problem is to change the block size or the amount of information adding to the block. There are several options for how to do this. But, there is no single decision-making center, since the crypto currencies originally represent a decentralized system. Therefore, in order to for some of the development paths to win, the consent of the key participants or the crypto community: major miners, developers, exchanges – is required. Miners, owners of “farms” should begin to rely on blocks of a new format, and developers, owners of purses and exchange sites – to provide their support.
On Monday, July 17, the SegWit2x protocol release-candidate came out and active support for BIP 91 also began. BIP 91also includes the activation of the Segregated Witness (SegWit) protocol.
What is the purpose of SegWit2x for crypto currency
The SegWit2x protocol assumes the extraction of parts of data into an additional block, which is located just next to the main one. In this case, the old network nodes (without the support of SegWit) see only the main unit and consider it to be correct, in spite of incomplete information. This optimization plan is Segregated Witness or abbreviated SegWit. This will increase the number of transactions without changing the block size of 1 MB.
The second measure, adopted under the pressure from large miners, involves increasing the block size from 1 to 2 MB. That will activate the hard-fork – the protocol change with the loss of backward compatibility. That is, Bitcoin users who do not update the software will not be able to work on the main network.
If the miners cannot reach consensus before August 1, then a second attempt will happen – activation of SegWit through UASF (User-Activated Soft Fork). In other words, users who support this option will begin to reject the blocks and transactions that have no support of new changes.
The goal of the Segregated Witness, or SegWit protocol, is to optimize the block size. That in the future will solve the issues of scalability of the Bitcoin network. Also, that concerns the block overflow, transaction speed, and commission reduction. In simple words, SegWit allows you to increase the efficiency of the blockchain without increasing the block size. We mean only the first stage of implementation of course.
The new protocol SegWit2x came out over the weekend. In “our opinion”, this decision is a compromise in the view of prolonged discussions about network scaling. The proposal involves the activation of the Segregated Witness protocol from the side of the miners, with the subsequent increase in the block size to 2 MB. From July 21, the miners should start using it for signaling in support of SegWit2x.
Such large miners as Antpool, BTCC and Bixin already support the protocol. However, some developers and miners still strongly oppose the software. According to them, it is still susceptible to errors. But, if the new protocol supports 80% of the blocks for more than two days, the threat of crypto currency segregation will decrease.
As of now, on July 19 the BIP91 for SegWit2X has reached the necessary 80% miner support level. The proposal needs to maintain this same level of support for 336 blocks. It’s roughly 56 hours for it to be activated on the Bitcoin network.