The countdown has begun towards the most important day in bitcoin’s history so far, August the 1st, a day when bitcoin is finally to decide what way it goes and how.
The picture is complex. There are now five clients, with maybe as many constituencies, within a bigger umbrella of big blocks and small block supporters.
The one that remains most used is Bitcoin Core (BC), a client completely transformed during the two years long debate as it replaced two of the most senior developers that had commit access, which allows them to send code towards production, with a third one voluntarily resigning from the position.
But the client remains known as Bitcoin Core and it has only one aim at this point: to activate segwit. A protocol upgrade that its critics say will make on-chain scalability a lot harder as its design is focused more towards keeping bitcoin’s on-chain capacity limited so that the network operates with full blocks, at least most of the time.
While its supporters say on-chain capacity should be kept limited so that everyone can run a node, with bitcoin transactions happening through intermediaries on layer 2 protocols, like the Lightning Network.
Its supporters have created an off-shoot of sorts from Bitcoin Core known as UASF, supported by some Bitcoin Core developers, like Luke-jr. Unlike Bitcoin Core, which has a threshold of 95% network hardware-share to activate segwit, UASF activates it on August the 1st regardless of any level of support from miners or anyone else.
That’s where the deadline comes from and, although many of them hardly agree on much, their opposers and supporters alike do seem to agree on the usefulness of the deadline, welcoming it for the bitcoin network to finally make a decision.
But, when it comes to decisions like these, there is no such thing as a bitcoin network, only bitcoin clients and their relationship to each other.
In that regard, Bitcoin Core and UASF are close, but not quite the same. Bitcoin Core still has its 95% threshold, UASF hardly has any miners, so neither can activate segwit based on current facts.
But, that’s the surface. In a different timeline, Bitcoin Core might have threatened to merge UASF in its own client. In this timeline, they probably didn’t need to do so because Barry Silbert, an investor in Blockstream, managed to get miners to agree to activate segwit.
They aim to do so through a “compromise” which activates segwit and then might or might not increase on-chain capacity through a hardfork. A compromise embodied in Segwit2x, a new client led by Jeff Garzick, one of the Bitcoin Core commiters who was replaced during the two years long debate.
That client, which has the support of nearly all miners, activates Bitcoin Core’s segwit and in the process activates segwit in Bitcoin Core too. Which probably translates to nearly all of the bitcoin network upgrading to segwit.
It plans to do so before the August 1st deadline. As such, once it activates segwit, the UASF client upgrades as well, making UASF irrelevant as its only point for existing is to activate segwit.
On the bigger blocks side, few of them think the hardfork will be followed through, not least because the “compromise” is the exact one reached last year, which led to nothing.
But they find themselves in a complex position because segwit is a soft-fork, which means nodes don’t have to upgrade, they can just ignore it, only miners need to upgrade and they plan to do so.
That means Bitcoin Unlimited (BU) wouldn’t automatically fork off. Instead, the client would be reduced to a light-node like status. In effect, made irrelevant, with their only option being to implement segwit if they are to really participate in the network.
Or, they could chain-split by changing Proof of Work (PoW) or through some other method. However, no such plan appear in sight. But they have an offshoot of sorts too, a new client that might become a player.
Bitcoin Adjustable Blocksize Cap (ABC) doesn’t need a PoW change to split as described in some length when Bitmain introduced a User Activated Hard Fork (UAHF).
That makes the split somewhat similar to ETH and ETC, with miners free to choose what chain they mine as they please, while both will probably attract some hashrate.
As the name says, BitcoinABC aims to increase on-chain scalability, with their site stating “ABC brings Bitcoin into the modern age with an exciting technological roadmap to enable massive on-chain scaling well into the future.”
Their hardfork activates, regardless of hashrate support, on August the 1st at 12PM UTC. Some suggest Bitcoin Unlimited would follow their approach. So big blockers might split after-all.
In an ideal timeline, exchanges would then list Bitcoin Core as BCC and Bitcoin Unlimited as BTU. Eventually, if one coin becomes dominant, say above 70% for a continuous timeframe, then that coin should probably be listed as just bitcoin with the ticker of BTC.
However, the exchanges ecosystem is a pastiche of sorts with different exchanges having their own business interests, especially if they have any relationship with some miners or some other businesses.
So they might continuously list Bitcoin Core as just bitcoin with a BTC ticker, as some of them have stated they would. Which may mean BTU would be a minority coin.
According to futures, despite criticisms of how the futures terms are set up, BTU still attracts a price of some $250, higher than ethereum’s current price. BCC and BTU combined trade higher than unsplit bitcoin.
That may change once trading goes live as it’s probable all exchanges would instantly list BTU, so the entire market would be able to pass judgment. If BTU trades higher, then exchanges would have no choice but to list it as simply bitcoin.
However, it is not clear whether they will actually split, but the two communities have such different and incompatible visions, it is difficult to see how they can continue staying together.
Moreover, if they don’t split now, they will probably split in three months because it is highly unlikely Bitcoin Core would in any way support the hardfork.
As such, they might as well get it over with. Hopefully then, they can stop bickering at each other, stop bikeshedding each other’s roadmaps, and just focus on their own projects, under the judgment of the free market.