Fork Wars: Segwit Lock-In and Communication Breakdown

Segregated Witness has officially locked-in and bitcoin’s price is currently coasting along at $3430. Even though Bitcoin market prices have rallied to new all time highs after the August 1 hard fork, both Bitcoin and the newly formed network, Bitcoin Cash still have some uncertain futures ahead.

Also read: Markets Update: Bitcoin Continues to Orbit Above $3K

Bitcoin Cash Pushes Forward as Network Strengthens

Fork Wars: Segwit Lock-In and Communication BreakdownThe hard fork happened, and the Bitcoin network split into two different blockchains that share a previous history. The Bitcoin Cash (BCH) network has survived an entire week, with five mining pools dedicating hashpower towards this alternative chain. Currently, the Bitcoin blockchain is still 899 blocks ahead of the new BCH chain, and it’s also 54 percent more profitable to mine BTC than BCH. However, this will change on August 8 as Bitcoin’s difficulty is going to increase approx. 7 percent while the BCH chain has been lowered to 17 percent of BTC’s current difficulty.

At the moment there have been 240 BCH blocks mined since the blockchain split and an ‘unknown miner’ has processed more than 83 percent of all the blocks in existence. So far there have been a total of 16 ‘big blocks’ (over 1MB) found on the BCH network with a few large ones being over 4MB. The other mining pools which are dedicating hashpower to the BCH chain include Suprnova, pool.Bitcoin.com, Viabtc, and the Bitclub. These four pools have only found 16 percent of the 240 BCH blocks mined. At press time the BCH chain is processing blocks consistently at a rate of 30-60 minutes per block with some longer intervals here and there.

Bitcoin Cash Markets

The price of Bitcoin Cash has helped mining profitability quite a bit as the price per BCH is roughly $380 at the time of writing. BCH markets dropped to an all-time low of just under $200 per BCH, but on August 6 the price rebounded during the day. Currently, BCH markets are up over 40 percent in the last 24-hours with a market capitalization of over $6.2B. Bitcoin Cash also has the third highest trading volume processing $394M over the past 24-hours. Both BTC and BCH prices started ascending on August 7 and Bitcoin hit an all time high of $3490 during the overnight.

Fork Wars: Segwit Lock-In and Communication Breakdown
Bitcoin Cash (BCH) prices have rebounded touching $380 on August 8, 2017.

Segwit Lock-in On August 8 Block 479707

Earlier this week news.Bitcoin.com reported on the Segwit2x roadmap and the possibility of Bitcoin turning into three separate networks. Segregated Witness (Segwit) has officially locked-in at block 479707, and a ~3 month hard fork timeline will now begin. Segwit activation will go live on the Bitcoin network on August 9. A vast majority of miners and businesses have supported the compromise to implement Segwit first and then follow with a 2MB hard fork this November. So far the plan has been successful, but many Core developers vehemently disagree with the second half of the plan. Every single Core developer has stated that they will not support a hard fork in November, which means Core software will not be aligned with the Segwit2x plan.

Fork Wars: Segwit Lock-In and Communication Breakdown
Segregated Witness (Segwit) has officially locked-in at block 479707.

The Civil War and the Rest of the Segwit2x Plan

Fork Wars: Segwit Lock-In and Communication Breakdown
Bitcoin Core contributor Matt Corallo (TheBlueMatt).

Now, software developer Matt Corallo (TheBlueMatt) and other Core developers have introduced a concept for the Core reference code. It seems the new idea will have Bitcoin Core 0.15.0 automatically disconnect nodes running Bitcoin-ABC and the Segwit2x fork.

“Immediately disconnect peers that use service bits 6 and 8 until August 1st, 2018,” explains Corallo’s proposal. “These bits have been used as a flag to indicate that a node is running incompatible consensus rules instead of changing the network magic, so we’re stuck disconnecting based on the service bits, at least for a while. Staying connected to nodes on other networks only prevents both sides from reaching consensus quickly, wastes network resources on both sides.”

‘A Very Hostile and Unsafe Change Prior to Segwit2x Fork Deployment’

Fork Wars: Segwit Lock-In and Communication Breakdown
Segwit2x lead maintainer Jeff Garzik.

After further feedback, Corallo explains that they updated to only disconnect bit 8 (Bitcoin-ABC), and the concept may be reviewed for other nodes in the near future. Segwit2x’s lead maintainer Jeff Garzik doesn’t like the idea and thinks it will create a “premature network split.”

“Deploying this change for NODE_SEGWIT2X – bit 7 – creates chain splits in the wild on an inconsistent basis” explains Garzik. “This creates chain splits even though Bitcoin Core and Segwit2x nodes are validating 100% the same rules today; it creates chain splits because of a presumed future rule deviation. The outcome is a bunch of non-deterministic islands.

This is a very hostile and unsafe change prior to Segwit2x fork deployment. It is safe and a convenient optimization for this codebase to make this change after a chain split, but not before.

Fear, Uncertainty and Doubt

‘Core’ developer Matt Corallo tells others that Garzik is just creating “FUD” and people should “ignore” his comments. “This obviously doesn’t create a split until their incompatible rules kick in, it will only make upgraded nodes more cleanly separated, it’s not like the network won’t still be well-connected,” explains Corallo.

It doesn’t look like the Segwit2x roadmap will be smooth sailing as Core developers want nothing to do with the second half of the compromise. Many speculators wonder why Corallo and other Core developers didn’t mention this concept earlier, as Segwit implementation was just about to lock-in. The argument on Github has continued for quite some time, and many ‘Core’ developers agree (Ack) with the idea of blocking Segwit2x and Bitcoin-ABC (Bitcoin Cash) nodes.

“@TheBlueMatt, Please reconsider that every disagreement of opinion is not “fudding”, and we can have an honest debate,” adds Garzik.

What do you think about Bitcoin Cash and Segwit2x? Let us know what you think in the comments below.


Images via Bitcoin.com, Pixabay, Bitcoin Cash, and Full Metal Jacket. 


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  • Jason Moore

    When is Lightning network?

    • PBV

      Good question. Maybe in a year or two. Maybe never. Still early alpha.

  • deedot

    The road is still long.

  • TheBlueMatt has it right. The rest of the Devs were hoping for free association across Core nodes. The choice has always been Garzik’s. Just think about it. If Garzik can go this far, why not produce your own coin on your own chain with your own service nodes? Obviously, TheBlueMatt has found the reason.

    • disqus_mj4qoegqlN

      If TheBlueMatt can go this far, why not produce your own coin on your own chain with your own service nodes?
      FIXED!

      • Ah Ha! Maybe true…these guys get more exciting the more they detail the moves. I cant wait for the result of their wills.

  • Ken

    if the hard fork happens in November, will that create another alt coin?

    • InOneHour

      Maybe we get more free coin?

      • Dr. Bubó

        Yeah, we double the ‘digital gold’ a couple of more times and their price will stand into the ground…

    • PBV

      @disqus_J24I8H92pZ:disqus , if the reporting is true and the Core developers continue to refuse to accept the industry consensus in order to serve their own interests then it will play something like this…

      Before the HF date, all of the signatories to the NY agreement will move off of Core software in favor of the BTC1 client or compatible software. That will include almost all of the miners and many if not most of the major economic nodes (exchanges, stores, businesses, etc.).

      On the HF date, all of the BTC1 miners and nodes will continue to work just fine, and people will be able to spend their BTC1 bitcoin as normal with all the NYA vendors. However, users who are still running Core software will be effectively cut off from the main network. If no effective mining power is running Core, then those users will just be “broken” until they update to BTC1.

      If some mining power stays on Core, that will create a chain split, with Core as the minority chain subject to very long confirmation times until they come up with a difficulty readjustment kludge like BitcoinCash did. CoreCoin holders still won’t be able to spend their coins with any of the NYA vendors, and their minority chain may be subject to attacks. If it persists, however, and exchanges and vendors choose to support it the way many are coming around to supporting BitcoinCash, then it will become a new altcoin.

      Then we’ll have three: CoreCoin (Segwit with 1MB blocks and no scaling), Bitcoin2x (Segwit with 2MB blocks and a commitment to scaling), and BitcoinCash (No Segwit with large blocks for scaling).

      • meltorgamblor

        The only thing I would add is if miners switch to BCC before November, and some likely will, the BTC block mining rate will drop below 10 minutes and push back the 2x date as it is set as block 494784. It could potentially push it back by months, in which case it will become more difficult for miners to stick with the NYA. Which would cause more of them to switch to BCC, and push the date back even farther.

        • PBV

          Huh. Excellent point. It seems unlikely that miners would defect in that sort of gradual way, but it would certainly have that effect.

  • Jim Shepard

    QUICK!! Sell all your BTC & BCC immediately before the big incoming crash happens! Coinbase will buy it all from you… 🙂

    • Dr. Bubó

      It is actually a good idea to dump it all on Coinbase!
      Sadly, they would make commission on the sale but there is no certainity that they would keep those coins for themselfes.

    • You made me laugh today! Coinbase? LOL!

  • RobSa

    Bitcoin appears to be centralising around Blockstream. Its not good.

  • sjs

    Keep it up Core boys, you’re paving the road for BCH. Is Core run by the Crazy Fat Kid, Kim Jong Un hell bent on destruction and mayhem?

  • Dr. Bubó

    If someone did not realise yet: Satoshi fucked up, he put democracy into the play. THIS will bring the end of ‘digital gold’ not governments or regulations…

    • meltorgamblor

      Don’t worry Doc, BCC has already separated from this mayhem and is bitcoin if core/2x implode (which I expect based on the miner’s incentives). Democracy is feeble in bitcoin. Stake holders ultimately dictate price by moving their sums in the market between chains, miners follow the value. It’s more of a stake-ocracy and the remaining Core devs don’t have much stake.

      Give it a week, at which point mining profitability switches chains, and both mining and value will start to flow into BCC.

      • Dr. Bubó

        Well, that would bring another chain of problems: Bitcoin is more known and popular (regarding merchants and public) and the reputation ‘digital gold’ would be destroyed. Since it has no intrinsic value, only trust, it can be quickly gone – for the whole crypto market. How can we keep it up?

        • meltorgamblor

          It’s hard for people to see with all of the crazy media to sort through, but bitcoin is just split in half right now. The stronger half will survive, and it will still just be bitcoin. The merchants will update to new versions of their wallets and carry on as before. It would have been more clear to call them BTC-A and BTC-1. One retaining the original name doesn’t make it more bitcoin than the other though, so BCC becoming the only bitcoin means just that bitcoin survived. (hooray!)

          As for the “digital gold” reputation, it doesn’t matter. It either is or is not digital gold. It is immune to manipulation through inflation. It is trustless. It is scarce. It is anonymous if you go through the trouble to make it anonymous. The fact of it being digital gold is more important than the reputation, which will be restored if it is damaged.

          • Dr. Bubó

            “It is immune to manipulation through inflation” Doubling it means inflation. Ether classic also exist, did not die out. And the digital gold reputation is the same as scarcity and trust.
            I can agree with the rest.

          • meltorgamblor

            There was no manipulation. It is not immune to inflation itself. Inflation is actually built in to the block reward. This unique event was inflation, but not manipulation (like someone with a printing press) because there was no re-distribution of coins.

            I suppose both might survive long term, guess we’ll have to wait and see.

  • pyner

    Yesss !! Let’s go SEGWIT2X…. Free coin in November, SEGWIT2X the new shitcoin