Segwit2x Forks, Nothing Happens

Segwit2x’s btc1 client has forked today at around 1PM London time at block number 494,782 three months after the activation of segregated witnesses (segwit), just as the New York Agreement said.

Btc1 nodes got stuck at block 494,782 and started rejecting any subsequent blocks starting with 494,783 as new rules for those nodes kicked in.

However, the chain is inoperational as no one is mining it as far as we know, with no blocks found so far, making the branch non-existent.

A number of business representatives and miners announced earlier this month that they no longer planned to go ahead with the 2x part of the New York Agreement.

But an alleged miner said they were going ahead anyway, while Coinbase has recently been making public statements saying they were closely observing the fork.

That’s probably because Coinbase stated they would instantly distribute segwit2x and list it for trading after the fork, with the cancellation announcement seemingly coming as a surprise to bitcoin’s largest broker and exchange.

Yesterday they said they will distribute segwit2x, but will not list it, if there is a viable chain, with the exchange continuing to say they were closely observing the situation.

They even halted operations for a few hours today during the segwit2x fork block, but have now seemingly re-instated normal operations.

That’s because it seems very unlikely a block on the segwit2x chain will be found as that fork has an equal level of difficulty with btc, while its price at this stage is around $500 according to futures. Making it very unprofitable to mine compared to btc.

The scalability debate, therefore, has ended after three years of constant arguing with the end result being two chains, bitcoin and bitcoin cash.

Bitcoin plans to create a settlement network where on-chain transactions are heavily congested and fees are very high with an initial target of $10 and a subsequent target of $100 and beyond.

Bitcoin Cash plans to create a peer to peer electronic cash systems where on-chain transactions process smoothly without delays while fees are in the cents or less.

Segwit2x was an attempt to merge both of these two visions, but it was called off following considerable opposition by mainly Blockstream employees who want to see the congested network reach a point where the mempool never clears.

Marking November 17th 2017 as the official day when the big bitcoin scalability debate ends, leaving two projects with very different visions to freely compete in the free market.