Bitcoin hard fork is canceled… or maybe not?
A few days ago, the developers of SegWit2x protocol suddenly announced that Bitcoin hard fork has been canceled. The statement was signed by principal members of the group, including Mike Belshe (BitGo), Wences Casares (Xapo), Jihan Wu (Bitmain), Jeff Garzik (SegWit2x lead developer), Peter Smith (Blockchain.info), and Erik Voorhees (ShapeShift).
The announcement says, “The Segwit2x effort began in May with a simple purpose: to increase the block size and improve Bitcoin scalability. At the time, the Bitcoin community was in crisis after nearly three years of heavy debate, and consensus for Segwit seemed like a distant mirage with only 30% support among miners. Segwit2x found its first success in August, as it broke the deadlock and quickly led to Segwit’s successful activation.” Members of the group insist that splitting the Bitcoin community into two camps was never in their plans.
According to the developers, their primary goal was a smooth upgrade of the Bitcoin infrastructure. The need for implementing SegWit2x is not in doubt; however, there are more important priorities that all developers share, and preserving a unified community is central. Since a consensus could not be reached, the developers made a decision to suspend the hard fork plans.
The SegWit2x group remains convinced that the Bitcoin network infrastructure will eventually, and perhaps shortly, still have to be upgraded in order to increase its capacity. Primarily, this is necessary for increasing the block size from 1 to 2 MB, a move that will help improve the efficiency of the entire Bitcoin network.
“We want to thank everyone that contributed constructively to Segwit2x, whether you were in favor or against it. Your efforts are what makes Bitcoin great,” say the Segwit2x supporters.
Certain groups and individual developers that initially supported the protocol later changed their plans, declaring that network operating under the Segwit2x solution lacked transparency, that the code had flaws, and that there were other urgent technical issues. Since none of their grievances was addressed, such major players on the cryptocurrency market as Bitwala and F2Pool, as well as the Bitcoin communities of Brazil, Argentina, and Hong Kong, withdrew their initial support for the hard fork.
Bitcoin’s exchange rate jumped to the record-breaking mark of US $8,000 before falling back to its pre-announcement level. It did resume its growth later on, but not at the same pace as before.
Does it all end here?
Not really. Yesterday, a little-known mining group named bitPico announced that it controlled more than 30% of the Bitcoin network hash-rate and declared its intention to finish what Segwit2x has started by going ahead with the hard fork.
“We are carrying out the fork regardless as everything is set in motion. Backing down the difficulty right now is a strategy. Wonder why 30% network hash-rate disappeared? It’s ours; the miners that will continue what is set in motion…” stated the group’s representatives.
Most puzzling about this story is the fact that few people understand what is really going on. Does the group actually exist, and if so, does it really control a third of Bitcoin’s hash-rate? Nobody knows.
Experts believe that it is possible that those behind bitPico are traders disappointed with the fact that SegWit2x futures (yes, such a thing already exists) tumbled more than 70% since the hard fork was called off.
It is entirely possible that the recent activity is merely rumors fueled by people trying to put some pressure on Bitcoin’s exchange rate. Yet, whatever the situation is, the reaction in the Bitcoin community is already palpable, and the tension caused by bitPico’s announcement is unlikely to dissipate soon. In theory, the idea that the commotion is due to a plot by crypto-asset traders trying to cash in on the hard fork rumors is plausible. To know the truth, all we need to do is wait for a little.
For now, let us monitor the situation without jumping to conclusions.
