Bitcoin Miners Almost Unanimously Support Segwit2x, Can Two Chains Really Survive?

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More than 93% of miners, very close to the 95% threshold usually considered unanimous for protocol upgrades, are currently supporting segwit2x as shown by their mined blocks.

That includes previously known strong Blockstream supporters, such as BitFury and BTCC, as well as all other major miners, including a very strong small block supporter, Bitclub.

Their decision, therefore, appears to be unanimous, reached after an agreement in New York to overcome the stalemate by implementing segwit, to be followed by a 2MB increase of the base blocksize.

Something that was implicitly and even explicitly supported by small blockers prior to segwit’s activation, but once segwit activated, Blockstream employees began loudly arguing against segwit2x, shortening it to 2x.

Which might suggest that if all miners do upgrade, Blockstream might split off to a minority chain, with a currency probably to be called Bitcoin Gold under a potential ticker of BCG.

But before that, they might try to keep the bitcoin brand and ticker by perhaps trying to keep alive bitcoin’s 1x chain without protocol level changes.

However, can they practically do so? If 93% of the hashrate does upgrade to 2x, the minority chain would find only 7% of all blocks.

That translates to just 10 blocks in a day, or 1 block every two hours, on average. But, variance would likely be considerable with such small amount of hashpower.

The tiny chain, therefore, might go 10 hours, or perhaps even an entire day, with no blocks at all. Which in effect means it is inoperational.

As such, it is unlikely any exchange would consider that chain as the primary coin, not least because its security would be so vastly inferior that just one bitcoin pool could potentially 51% attack it.

And if some exchanges do list the chain with such tiny hashpower under the BTC ticker, while other licensed exchanges necessarily have to list the chain with all miners under the BTC ticker, considering the potential confusion, miners might not only be incentivized but may perhaps be left with no option but to attack it.

The minority chain’s only option, therefore, would be to implement protocol level changes. At which point, its security would be vastly lower. Thus, regulated exchanges, which have as first priority the safety of coins, would probably have no option but to list the majority chain as BTC, because the minority chain has in effect sacrificed security by making protocol level changes.

There are of course highly exceptional circumstances where sacrificing security might be supported by the market, but it’s unlikely an extra 1MB of data is one such circumstance.

Therefore, it does seem the case we are unlikely to have two chains operating without protocol level modifications, and if the minority chain does make such protocol changes, then it has conceded the name and ticker.

In which case, they should leave amicably, give their new chain a new name, such as Bitcoin Gold, and a new ticker, such as BCG, implement replay protections, and compete in the market along all the other thousands of currencies and tokens.

 

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