SegWit2X: For the Bitcoin Community, Drama is the New Normal

The price of Bitcoin hopped over the $6,000 barrier easily a few times since Friday. The market capitalization is $100 billion, the size of a large corporation. Japanese pensioners are using Bitcoin as a source of side income, and the picture looks rosy. But underneath that, few of the star-struck investors may notice the drama and danger for Bitcoin.

Bitcoin is, in fact, undergoing another big stress test with the upcoming November hard fork, a split between Bitcoin Core and a group of supporters who have planned to fork the blockchain and implement a code allowing for larger blocks. And it would not be just a test for the market price, which has fluctuated significantly due to many factors- it would be a test of the technological system itself.

Until the last moment, the support from miners remains just above the cutoff line of 84%. But those are just preliminary signals, as support fell, then increased somewhat in the past week.

Worldwide communities go as far as writing in opposition of the split, which they believe is a sort of cartel agreement for a few crypto players. The Brazilian and Argentinian cryptocoin communities hold that:

" The NYA narrative framed the situation as a scaling gridlock that needed be solved, thus an agreement between relevant actors (developers, miners, exchanges, payment processors) was sought after. But the very nature of an “agreement” between a few parties in a decentralized consensus protocol can be interpreted as an aggression against the network."

One of the more curious signals of support comes from Charlie Lee, creator of Litecoin. He arranged a swap between coins in the case of a blockchain split- deciding to keep coins with a 1MB size and exchange the new coins with Roger Ver, known as "Bitcoin Jesus."

My trade with Roger Ver is all set. Here are the terms we agreed to. Let the chips fall where they may! 🚀pic.twitter.com/wEHiH9guM6

The optimistic view of the hard fork would be that users will keep their Bitcoin, and receive an airdrop of new coins soon, provided they keep the private keys or store the coins on the right exchanges. But the split may not produce two friendly, hassle-free assets. There are several points of risk and confusion:

• Exchanges and Wallets: Some exchanges and wallets, like Coinbase and the XAPO wallet, will award the BTC ticker to the chain with the greater difficulty. So, the "real Bitcoin" will be a matter of mining support and it may clash with the users' preferences.
• Mobile Wallets: Mobile wallets may be confused when they look for data on the right blockchain. Some wallets are designed to follow the blockchain with most miners and greater difficulty, in effect deciding for the user which coin is considered "A Bitcoin". Spending on the wrong blockchain may lead to losses, so for now users are advised not to use their mobile wallets for a while until the fork has stabilized.

Currently, it is impossible to say if the SegWit2X blockchain would be robust enough, or what price the asset would command. In principle, miners can always abandon a blockchain or return to it, if profitability and block rewards look appealing. We have seen this with Bitcoin Cash, where miners are most attracted by periods of low difficulty.

Experts remind that the Bitcoin network is not secured just by miners, but by nodes verifying the transactions.

"If miners did have the sole power of affecting protocol changes at their own discretion, Bitcoin wouldn’t be a robust and secure network," mentions the statement of the Brazilian and Argentina Bitcoin communities.

Currently, the SegWit2X network has significantly less nodes for verification compared to Bitcoin Core. And the other problem is, the scaling solution of 2MB blocks