Bitcoin Miners Hold “Emergency Meeting”

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Bitcoin’s biggest mining pools, including Bitmain, BTC.TOP, F2Pool, BW, ViaBTC and others, as well as exchanges like OKCoin and Huobi, held an emergency meeting on July 24th where they stated:

“We still believe that the blockchain upgraded the SegWit2x protocol (including SW and 2M) is the only chain that can be named with “bitcoin (BTC)”. BCC is just an altcoin by copying the bitcoin chain and modifying a certain code. Please be aware.”

Bitcoin miners at the “scalability workshop” in 2015.

Bitcoin Cash (BCC) is a hardfork chain-split of bitcoin which rejects segwit. Instead, it increases on-chain capacity by lifting the 1MB hard-limit to an initial 2MB soft-limit and an 8MB hard-limit with the aim of allowing bitcoin’s blockchain to meet transaction demand.

The slit appears to have grassroots support of big blockers who see segwit’s 75% discount as an attempt to limit on-chain capacity.

That’s because signatures (key hashes) are not counted in the segregated witnesses (segwit) rules, although of course use the bandwidth as normal, so bypassing the 1MB hard-limit through the 1:4 trick whereby 1MB of normal transaction data can allow up to 4MB if 75% of the transaction data is signatures.

Ordinarily, signatures are less than 50%, with usual capacity estimated at around 1.7MB. The 2x part of segwit2x will increase that by changing the 1:4 ratio to 2:8. That is 2MB of ordinary data plus a 6MB maximum of signature data which translates to around 3.4MB for ordinary use.

The discrepancy between the maximum data and ordinary use limits on-chain capacity as the network has to consider the max-data attack vector. Thus at 4MB it would need to consider whether it can handle 16MB and so on.

Bitcoin Cash, through the BitcoinABC client, does not implement the max-data attack vector. Thus 4MB there gives 4MB transaction capacity too, rather than 1.7MB, while at 8MB the network can handle 8x current capacity, rather than 3.4x under segwit.

The BitcoinABC client, which is to chain-split and create Bitcoin Cash on August 1st, has now seemingly taken a life of its own, attracting grassroots support. Something which has apparently taking miners and others by surprise, potentially explaining the “emergency meeting.”

It’s not clear whether the meeting was in the open or whether any independent journalists were invited with no further information provided except for the above quote. But the fact that they can so meet at such short notice might indicate bitcoin’s decentralization levels have considerably decreased.

Something which may change with Bitcoin Cash as it opens the decision to the free market, the ultimate 51%, on what is the best way forward for the less than a decade old digital currency.

 

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