Chilean Bitcoin exchange SurBTC announced Tuesday that although it loves the idea of SegWit, it’s pulling its support for the hard fork project.
SurBTC has become the latest to withdraw its support for SegWit2x, further showing the unease many have about the New York Agreement outlining the terms of the hard fork.
In a blog post, the Chilean startup said that while it’s always loved SegWit from a technical standpoint, it sees many mitigating factors that cause it angst. It’s in a lot of company, as its sentiments over the agreement are shared by several others that signed it, and have also withdrawn support.
Troublesome is that the withdrawal by SurBTC, a Bitcoin exchange, along with the others, are coming just a month before the release of SegWit2x.
Let’s explore what’s happening.
SegWit2x is a proposal aimed at improving Bitcoin’s transaction capacity through a hard fork. It has been scheduled to take place in November.
While it was at first embraced by Bitcoin startups and miners, it’s started to fall out of favor with the Bitcoin community as that November date nears. At issue are what exactly is to be achieved of the fork, and the technical issues involved.
As noted above, SurBTC acknowledged that it was one of the early embracers of SegWit. The idea of a small increment (2mb) in the size of the block, which was part of the SegWit2x proposal was seen as a good idea because of several reasons. This includes lowering fees and allowing time to other definitive scaling alternatives, such as the Lightning Network, to develop.
Now for the but.
SurBTC said its concerns eventually won out, and it could ignore them no more. In the blog post, it wrote it did not believe in trying to force change in which Bitcoin’s core developers do not feel safe.
“…we cannot pretend to be bitcoin "scaling experts." The technical background of the team that currently collaborates on the core bitcoin project has an unprecedented level, we believe them to be, at least as a group, unbiased experts who deserve at least a voice on the subject.
Not going against the grain
The need for SegWit2x has diminished since SegWit has been activated on the Bitcoin network. Furthermore, Bitcoin Core has firmly come out against the proposal.
In what seemed to be an attempt to break news of its withdrawal in the nicest way possible, SurBTC said that even though it would be happy to have “moderately larger blocks to accommodate growing demand,” it was not sure SegWit2x was the solution.
“Although we would be happy to see moderately larger blocks to accommodate the growing demand for space in the Blockchain, we feel that Bitcoin needs (at least most) support from core project developers. We have not seen this support and we do not like at all what we currently see in the btc1 repository for open source collaboration.”
SurBTC also expressed its loyalty to Latin American users, proclaiming itself as the watchdog over the interests of this growing community. It added that these users are “strongly opposed to a new hard fork conflict.”
That said, if a conflicting hard fork actually occurs, SurBTC is open to listing both BTC and B2X. It said that for “practical reasons” it would continue to list BTCs and incorporate B2X (with industry names) later.
There has been a push for crypto companies to drop out of the agreement and withdraw their support for the hard fork, so we may see even more actions like SurBTC’s before that scheduled drop date for SegWit2X.