Bitcoin – Potential Network Disruption on July 31st

With segwit, you can use http://lightning.network. Lightning network gives you essentially unlimited transaction speed.

It is probably not possible to solve the scaling problems on-chain - a secure decentralized consensus on a global scale cannot be fast. Currently the bitcoin protocol processes about 7 transactions per second. Doubling the speed by doubling blocks will not make it much closer to the 50K transactions per second of a system like VISA. But it is probably possible to scale the transaction system off-chain - with https://lightning.network/ - which works like a protocol for writing and accepting checks. As far as I know Lightning is impossible or very hard without SegWit. But with Lightning off-loading the bulk of transactions miners will lose a bit of their power - so maybe this is what makes them against it.

Another aspect of the riddle is that SegWit will eliminate ASICBoost - which is an optimization developed by one of the biggest ASIC miners producer - so he is probably also against it. There is also the thing that ASICBoost is probably patented - so it has a lot of opposition in the community.

There's currently 86.5% support.

If you hold Bitcoin then you need to think about getting hold of your private keys or using a non custodial wallet like https://strongcoin.com

If the network splits there will 1 or 2 new types of Bitcoin.

If the exchanges decide to support the new types of Bitcoin you will be able to sell your holding on the new chains whilst still keeping coins on the main Bitcoin chain.

But to do this you need to manage your own private keys.

A neutral response would probably not use the phrasing 'muddle through' with regards to the solution endorsed by most of the technical experts in the Bitcoin space.

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Right now there are 3 implementations of Bitcoin in the wild, and each of the 3 will react differently to different network events. The network is essentially splitting apart, with each fragment driven by a different faction.

If you don't know what the different factions are, you probably don't need to. Its needlessly involved, highly political, and full of echo-chambers and shouting matches.

What happens largely depends on how much support each faction has. Unfortunately, there's no real way to measure how much support each faction has until the fork actually occurs. Each faction thinks that its the largest by a significant margin, and thinks that the other factions have used underhanded techniques to bolster their visible support.

When the rubber meets the pavement, we will know though. If the network splits into three pieces, likely the coin price for each piece will move around violently, and one portion of the network will probably end up with a much higher coin price than the other parts. Or maybe it'll be an even three-way split, which will make things in the Bitcoin world very confusing.

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As a huge Bitcoin fan, I hate to say this, but if you aren't clued into the various events, and you can't name the three factions or explain the beliefs of each, you should just stay away for a while. If you get pulled into the split without knowing what's going on, you are very likely to lose money. There will certainly be opportunists trying to take advantage of the situation, and you, being ignorant of the situation, will be the one who gets taken advantage of.

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If you do know what's going on, you can name the factions, etc, then what you should do is pretty simple. When the split happens, sell all of your coins on the forks that you disagree with, and use the resulting money to buy coins on your preferred fork.

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For anyone who cares, my alignment is with the status quo. I feel great animosity towards the hardfork faction (confusingly called Segwit2x), precisely because they have forced a situation where people who don't know what's going on are able to get hurt. They have also repeatedly, repeatedly, ignored very sound advice from the technical experts of the industry.

The UASF faction (confusingly, a 'pro Segwit' and 'anti Segwit2x' faction) has my spiritual support, but I don't think they have the numbers behind them to make a difference. I don't think running the UASF software is the right move.

I personally believe that overwhelmingly, the vast majority of people who use Bitcoin are probably largely unaware of what is happening, and are running the status-quo software (confusingly, the 'Segwit' software, or the 'Bitcoin-core' software). I'm guessing when the forks all happen, it'll be pretty dominantly vanilla Bitcoin with the highest price, and then a few weeks later it'll all be a bad memory, and nothing will have happened at all.

I guess we'll find out.