Bitcoin & Litecoin Scaling: Segwit2x + 2MB Hard Fork
Segregated Witness has locked-in and the Segwit2x working group has announced its roadmap for the next three months. The team of developers have detailed they are going forward with the 2MB block size increase that miners and businesses agreed upon at the New York Agreement.
DCG Founder Barry Silbert Sparks Another Compromise Discussion
On May 17 the founder and CEO of the Digital Currency Group (DCG), Barry Silbert, arguably the most prominent investment firm in the bitcoin and blockchain industries, revealed that miners and businesses came to a consensus to solve bitcoin’s underlying scaling issue.
Many bitcoin proponents are at odds trying to figure out the best solution at hand to scale the digital currency. announced he was in favor of supporting immediate Segwit activation and a block size increase.
Bitcoin Scaling Agreement at Consensus 2017 can be found here
‘Compatibility With the New Larger Blocks’
The announcement explains the upgrade to 2MB was first discussed at the ‘Hong Kong Roundtable Agreement’, and had further solidified at the ‘New York Agreement’ (NYA) this year at the Consensus conference. Both agreements involved implementing Segwit first and a block size increase from 1MB to 2MB later. The working group says, now that Segwit has locked-in, the ecosystem should update to Segwit-compatible software if they want to benefit from the protocol. Alongside this, the announcement explains “readiness” preparation for the fork including port changes, network changes, DNS seeds, and the Segwit2x “Testnet5.”
SegWit2x NYA Status could be found here of the New York Agreement
How Segwit on Litecoin Affects Bitcoin
The main way in which Litecoin’s Segwit activation will affect Bitcoin is that Segwit will get tested in a production setting. This may or may not convince various parties that Segwit is indeed safe.
The other part of the Litecoin agreement that’s worth paying attention to is the concessions that the miners got. Specifically, the resolution decided to not advocate flag-day UASF, condemned DDoS attacks and agreed to increase the block size limit when capacity hits 50%.
These are three very important concessions that basically lay out the basis of activating Segwit on Bitcoin. If you remove the UASF and DDoS clauses which didn’t exist at the time, it’s actually not that different than the infamous Hong Kong Agreement.
What a Bitcoin Agreement Might Look Like
Should Segwit go well on Litecoin and Segwit proved in a production setting, we can imagine that an agreement can be reached that’s pretty similar. An agreement like this might not be unreasonable:
- Segwit activates as-is.
- Flag-day UASF is discouraged going forward.
- Should total block capacity be above 75% or non-Segwit block capacity be over 95% in any two-week period after Segwit activation, 2MB non-Segwit block hard fork will be planned over a 6 month period and activated in no less than 12 months.
Lastly about the difference between Bitcoin Scaling Agreements — Hong Kong Consensus vs New York Consensus
The details could be found here as the break down to details
SegWit2x and lack of support from community
The majority of the Bitcoin community opposed the activation of SegWit2x, due to the lack of support from Bitcoin Core developers and users. Acknowledging the decline in the probability of the Bitcoin community agreeing to the SegWit2x proposal, the companies behind the movement proposed a hard fork execution in November, to create a separate Bitcoin-based Blockchain network, like Bitcoin Cash.
One major issue with SegWit2x is the timing of the proposal. It is rather odd that a centralized group of businesses are trying to alter the Bitcoin protocol without the agreement of Bitcoin Core developers, the open-source development community, the industry, and users. More to that, SegWit is still at its early stage in adoption and it already has demonstrated significant impact on the Bitcoin network in terms of scalability. Although only five percent of transactions are SegWit-enabled as of now, the average block size has decreased from 1MB to 0.86 and the size of the Bitcoin mempool has decreased from 150 mln bytes to less than 10 mln bytes.
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