Bitcoin is approaching what seems to be the end of Phase 1 of the scaling ordeal it has been going through for some time now and here is what I know about it. I will do my best to keep it short and poignant.
Since last year (2016) Bitcoin has been experiencing a large backlog in transactions and ever-increasing transaction fees that reached an all-time high at over $10 on some occasions earlier this year.
For some time now the community has been going back and forth between a number of scaling proposals, Segwit [BIP141] Bitcoin Unlimited [BUIP] being the more well-known.
In the first quarter of 2017 we saw a resistance from the miners majority, who seemed to be in favour of larger block size (and possibly with the added benefit of higher fees) and did not signal for Segwit which was a necessary step in the BIP 141 proposal. This resulted in a series of follow-up proposals, most of which were focused around Segwit implementation and differed in the way it could be imposed to the network (a difficult task in a decentralized and not-so-united network as it appears).
Then came the controversial BIP 148 with its threat to forcefully activate Segwit on 1st August 2017 and exclude any non-Segwit mined blocks from the network thus creating a hard fork and a Split in the Blockchain.
Which in effect was the worst-case scenario for the Bitcoin community and users at large due to the fact that it had a lot of support at first (BIP148 was heavily promoted as the best solution by some of the Core Developers and for some time it had gained up to 30%+ of the popular vote in no time)
In May 2017 we heard about the Consensus 2017 meeting where another proposal came to light.
Known as Segwit2x, this was an attempt to unite the two opposing sides of the coin [figuratively speaking] and combined the growing in popularity “Segwit” solution with the much desired “bigger blocks size” – the proposal was signed by a significant number of economical nodes and most of the big wallet providers and exchanges which also gave the community another strong card to play against the threat of the chain split.
“Should Segwit2X come into light before 1st August, then BIP 148 would not occur“… or at least this was the popular opinion on the numerous blogs and video reports.
Fast forward another month and we are in July, there is yet another proposal, this time launched almost in the last hour – BIP91.
This is now the most possible outcome and savior of the day. The reason for it?
Segwit2x s not possible within the timeframe we currently have until Aug 1st and what BIP91 does, is allow for a Segwit activation now with later adoption of the larger blocks size which is in effect a soft fork and it is expected to be a very smooth transition without any major truce in the market price if all goes well.
There are some reports (mainly on Bitcoin.com which was openly against Segwit from the start) that warn about the possible BIP148 split still going through and subsequently there is another minority of miners (and a Chinese exchange) who have agreed to a proposal calling for a UAHF (user-activated hard fork) that became known as Bitcoin Cash (BCC) in the case of BIP148 activation. They are led by Bitmain and on their blog you will find detailed article about their “contingency plan” as they call it.
I don’t see BCC as a serious threat to Bitcoin, after all, Segwit is supported by 90% of the Bitcoin community and as today’s articles read, we are one step away from closing the deal on Segwit with or without the larger blocks (which are due in October 2017).
What can you do to be extra-safe:
Store your Bitcoin away from the cloud wallets or exchanges for the next week, wait until the pivotal date Aug-1st is past, Don’t do any Bitcoin transaction on that day just to avoid any mishaps and don’t stress about it.