Segwit Locks-in, Segwit2x Declared “Cancelled” By Blockstream, Bitcoin’s Price Falls

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Segregated Witnesses (segwit) has finally locked-in on the Bitcoin Core chain at around 8PM GMT yesterday after more than a year of stalling and delay.

It is now expected to activate and go live on or around the 21st of August following 2016 mining blocks, increasing capacity to around 1.7MB dependent on  its level of adoption.

Segwit begins its activation period.

Just hours after segwit locked-in, Samson Mow, Chief Strategy Officer at Blockstream – a for profit company that hires many Bitcoin Core developers – declared segwit2x “cancelled.” He stated:

“Public Service Announcement: New York Agreement November #SegWit2x hard-fork has been cancelled.”

The New York agreement is similar to the Hong Kong agreement reached last year. Miners and businesses agreed to activate segwit and then three months later to hardfork increase bitcoin’s base block-size to 2MB.

The later part is being strongly resisted by Blockstream specifically, but also other Bitcoin Core developers, who have agreed to lock-out segwit2x nodes.

Bitcoin Core developers and some Blockstream employees/contractors dining.

Mow’s statement was met with a reply from Guy Corem who used to be (and may still be) a strong supporter of Bitcoin Core. He says:

“Pre HK agreement, Samson Mow was pretty militant about Core and vocal in his demands for HF in some internals discussion I was part of… The metamorphosis this dude went in the last 18 months is nothing short of amazing.”

Mow used to work at a Chinese bitcoin exchange, BTCC, and was somewhat neutral in the debate, but then begun strongly supporting small blocks and was eventually hired by Blockstream.

Bitcoin’s recent price action.

Bitcoin’s price begun moving downwards after segwit locked-in, starting its fall from around $3,440 at around 9PM, then accelerated downwards to a low of $3255 at around midnight, shortly after Samson’s tweet.

It has now recovered somewhat to $3,300 and the price movements may be coincidental, but some uncertainty has now been re-introduced in the Bitcoin Core chain.

Miners retain many options. They could, for example, move to the Bitcoin Cash chain, which might significantly delay segwit’s activation, perhaps even beyond November.

But it’s not clear whether they have any real appetite for further increased capacity. They may be enjoying the high fees and might have perhaps delayed even segwit under the pre-text of a blocksize increase, which has been made as clear as day that it won’t happen as far as Bitcoin Core is concerned.

That, however, is speculation with the picture somewhat complex following the addition of segwit2x that was suddenly proposed after a non-public meeting of businesses and miners.

 

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