Over the next two weeks, bitcoin proponents from both sides of the scaling debate will be preparing for a possible hard fork. A lot of people believe the Segwit2x fork will be entirely different than August’s bitcoin cash fork, and for good reason.
The Forking: 21 Million Ways to Die — Choose One
One of the biggest reasons for Segwit2x uncertainty is the amount of hashrate indicating support towards upgrading the block size to 2MB. Right now over 84.9 percent of the Bitcoin network’s miners are signaling their intentions to support Segwit2x. The question many people are asking is what will happen to a minority network with very little hashrate and no emergency difficulty adjustment?
There are quite a bit of bitcoiners that are enthralled by the drama between Core supporters and Segwit2x supporters. There’s the fighting about replay protection, and calling Segwit2x a corporate “takeover” or an “attack” by Core developers, some whose businesses are also ironically funded by venture capitalists and corporations. Then there’s the biggest question of all — Which is more powerful? Miners or those of us running full nodes. The topic often revolves around game theory and discussions about what could happen when the hard fork takes place.
If over 80 percent of the hashrate decides to fork away from the rules implemented by Core software, then it might leave the minority chain with very little hashrate. A minority chain with a minuscule amount of hashrate that goes up against bitcoin’s current difficulty will have a tough time surviving. It means that the hashrate minority will have to wait for 2016 blocks until the difficulty can be adjusted. With no mining power, a chain in this state facing bitcoin’s difficulty could very well come to a screeching halt.
Memories from Past Hard Forks
Back when the infamous Ethereum Classic (ETC) fork happened, the chain had to deal with the legacy Ethereum protocol’s difficulty when the two chain’s first split, but this difficulty, of course, was exponentially lower than bitcoin’s current difficulty. At first, ETC’s blocks were a bit slow but the transition adjusted quickly due to a much shorter difficulty adjustment period, and in a short period of time, ETC’s chain was chugging along. With the Bitcoin Cash (BCH) fork, developers had implemented an Emergency Difficulty Adjustment (EDA) protocol which kept the chain going by making adjustments that differed from the 2016 block rule. The BCH chain was able to adjust the difficulty down, and at times the network has been more profitable to mine or on parity with bitcoin’s mining profitability. The current bitcoin cash EDA will be changed on November 13 as the network faces its own hard fork.
Speculators and game theorists believe the Segwit2x plan this November is a big problem for the minority hashrate side, and that there is not much that can be done to avoid the chance of one chain having issues with the current BTC difficulty. However, some people believe there is something the minority chain can do, and that entails implementing an EDA or change bitcoin’s consensus to something other than Proof-of-Work (PoW). Yet, there is very little time for any of these remedies, and it’s highly unlikely they will be implemented.
Lifeboats and No Life Jackets
Skeptics from both sides of the debate also believe there may be some ‘lifeboats’ if these protocol changes in November start to get messy. Bitcoin cash fans think that this could be a turning point for BCH and it will strengthen that network more. While other speculators believe the new bitcoin gold project could be the ‘underrated bitcoin’ as well. But of course, like many things in the land of cryptocurrency, some of these theories are all based on crazy internet speculation.
There’s really no telling right now what could happen, but many people are starting to envision scenarios based off of Ethereum Classic and Bitcoin Cash fork memories. Just recently bitcoin’s former chief scientist, Gavin Andresen said a provocative statement to his Twitter followers about the situation.
Metrics of Uncertainty
Further, the Segwit2x side may not have all the advantages as the project’s true hashrate is considered debatable. For instance, the Chinese mining operation F2 Pool has stated they will not support the upcoming hard fork and stopped signaling ‘NYA’ in their blocks corresponding coinbase data. Slush pool doesn’t support the fork, and Viabtc recently said its mining pool users don’t have much interest in Segwit2x. So really supporters of the 2MB upgrade will have to depend on the honesty of miners who are signaling and hope they can pull it off like the recent Segregated Witness implementation.
BTC1 (Segwit2x) repository developer Jeff Garzik has added BIP102 into the protocol which will essentially create a “flag day,” and all the miners who signaled ‘intent’ must put their hashrate where their mouth is. But on the other hand, those running full nodes think the hash power might not matter as they believe not many people are running BTC1 software, and the small minority of those who are will be rejected for breaking consensus rules. The Segwit2x working group has also merged the ability to not advertise the BTC1 software which may make things difficult for 0.15 Core node banning. Furthermore, with all the drama across mailing lists, social media, and Reddit forums, BTC1 lead Garzik says the project is “still full steam ahead.”
Consensus and the Game of Chicken
The fact of the matter is we don’t know what will happen with the Segwit2x fork and the “bitcoin” brand even after these historical forks take place. Some people believe bitcoin cannot come to consensus at all and miners cannot change the base protocols rules on a whim. However, the other side thinks miners have changed rules in the past like implementing Segwit this past summer, the fork on August 16th, 2013 at block height 252451, the infamous March 2013 fork, and other protocol changes made over the years.
Right now both groups seem to be playing a game of ‘chicken’ to see which one swerves first. At the moment, there are three scenarios: both sides will swerve or go straight colliding, one team will simply move out of the way voluntarily, and lastly, one with little to no hashrate could drift and fly off a cliff.
What do you think will happen during the Segwit2x hard fork? Let us know in the comments below.
Images via the movie ‘The Shining,’ Pixabay, Bitcoincash.org, Ethereum Classic, and Coin Dance.
Need to calculate your bitcoin holdings? Check our tools section.