Update for Customers with Bitcoin Stored on GDAX

Update for Customers with Bitcoin Stored on GDAX
blog.gdax.com

Now they're following an agenda to deliberately prevent the blockchain from scaling in the way it was originally designed to. Why? To make the blockchain look ineffective - and now we have high fees and slow confirmations as a result. Bitcoin is badly affected by the congestion and so people are becoming desperate and clamouring for Blockstream's forthcoming off-blockchain scaling solution.

This would have worked out pretty well for them except that there has inevitably been opposition to these political games. A couple of other development teams have sprung up with forks which are more closely aligned to Satoshi Nakomoto's original scaling vision. These groups have been vociferously attacked by Blockstream and Blockstream has generated terribly misleading FUD about them in order to try to retain their control of the ecosystem.

Blockstream has failed. One of the alternate implementations "Bitcoin Unlimited" has all but won the war because the majority of miners are worried that the ecosystem is being damaged by Blockstream. Miners care about the value of their bitcoins and that's being eroded by the Blockstream-imposed congestion. The miners appear to be moving to Unlimited and it will most likely take over as the standard "Bitcoin" implementation at some point.

The whole "chain split" thing is mostly more FUD. A hard fork isn't a big deal if handled sensibly. The minority chain will quickly die off naturally because it'll be uneconomic to mine on it. This is just as it was designed to work by Satoshi Nakomoto.

No doubt people from the other side of this debate will see things differently but that's how it looks to me.

The two "leading" sides of the debate are engaged in a heavy propaganda war with each other and it seems that consensus is going to be tough to come by. These two factions seem to be essentially competing for "control" of the network. To make matters worse, the network has periods of huge transaction backlogs due to blocks being full.

Bitcoin Unlimited is the incarnation of one of the methods to scale the network. Supposedly, there is a large amount of mining power, which is fairly centralized in China, supporting this method.

I can't say much more than this with certainty, as there is a TON of propaganda to sift through. From what I can gather the argument boils down to the BU developers believe their method is an immediate fix to the current scaling problems. Core contends that BU has been spamming the network to create a false sense of urgency, and that the BU solution will allow miners too much control over "Bitcoin" (whatever fork it ends up being) in the future.

WRT to immediate impact, expect huge volatility in the price. Some of the trusted BTC analysts are calling for further, significant shedding of value due to the uncertainty in the future. Additionally, keep your coins in your own wallet. If you're using a web-wallet, there's no telling what you'll end up with if the fork happens unless they've made specific statements regarding their plans. Held in your own wallet, if a fork occurs, you'll hold both BTC (in the classic sense) and the BU-BTC.

Increasing the size of the blocks has been discussed for years. There are upsides and downsides to larger block sizes. If there was a strong consensus for a change, and everybody just updated their software with new blocks size limits, that would work out OK. The problem is that a substantial fraction, maybe 40%, of miners want a change, but the rest of the miners aren't willing to go along. There is thus the possibility of a "hard fork", as happened to Etherium.

A hard fork of Bitcoin has considerable implications. Now there are two kinds of Bitcoins, probably called BTC and BTU. Unless there's a mechanism to avoid it, each current Bitcoin turns into two, one on each blockchain. This is a form of dilution, and the price should drop. The people with Bitcoin futures are very upset about this, and the exact language of futures contracts becomes very important.

[1] https://bitcoinfees.21.co/