SegWit2X Fiasco Sends Warnings Two Years Down the Line

Published on November 17, 2019 by Cryptovest Staff

The proposal to cause a mining war in 2017 did not harm Bitcoin (BTC), but Ethereum (ETH) may see a similar scenario.

In 2017, Bitcoin (BTC) saw a scaling debate that generated two significant events - the fork of Bitcoin Cash (BCH), and the attempt to pass the SegWit2X update. The biggest fear of contentious forking now affects Ethereum (ETH), where miners have significant influence and may continue supporting a chain without the developers’ approval.

https://twitter.com/miiyuwa/status/1195898499130372097

On November 17, 2019, the mining of the SegWit2x blocks failed immediately. Supporting miners started the new chain at the wrong block, leading to an immediate standstill. The markets never saw the hashing war that was predicted, and the speculation on SegWit2X futures stopped.

Soon after that, BTC went through its biggest rally in history, and the SegWit2X was largely forgotten. However, the threat of contentious mining is not to be ignored.

A year after the SegWit2X, the crypto community saw a demonstration on what happens when miners compete without clearly splitting the chain, creating a series of “uncle” blocks based on different code and rules. The result was the 10-day hashing war between Bitcoin Cash and another version. Later, the miners that attempted to subvert the main chain split clearly, creating a hard fork and Bitcoin SV (BSV).

The example showed the real dangers of two competing mining teams. Recently, Bobby Lee, a prominent supporter of SegWit2X, stated he now realizes the intentional mining war was “dangerous” and could have hurt the reputation of BTC.

https://twitter.com/eric_lombrozo/status/1195819319365529601

The failure of the episode generated new discussions on the role of miners, and whether their decision could sway the network. In general, the market price of an asset can also define the loyalties of a miner. Adam Back, founder of Blockstream, believes miners and nodes will eventually follow the markets.

https://twitter.com/adam3us/status/1196353232400011264

At this point, it is theoretically possible there may be a hashing war. However, in practice, most large pools are cooperating. The BTC hashrate is also as much as 20 times higher in comparison to the fall of 2017, and while SegWit2X could have led to a significant stand-off, it is now almost impossible to challenge the immense hashrate that easily surpasses 100 EH/s.