Morning of November 8, BitGo CEO Mike Belshe announced the end of SegWit2x on the SegWit2x Mailing List. This announcement included signatures from many of the major hard fork supporters, including ShapeShift CEO Erik Voorhees, Bitmain founder Jihan Wu, Xapo CEO Wences Casares, Blockchain CEO Peter Smith, and SegWit2x lead developer Jeff Garzik:
“Although we strongly believe in the need for a larger block size, there is something we believe is even more important; keeping the community together. Unfortunately, it is clear that we have not built sufficient consensus for a clean blocksize upgrade at this time. Continuing on the current path could divide the community and be a setback to Bitcoin’s growth. This was never the goal of SegWit2x.”
Belshe further stated:
“Bitcoin remains the greatest form of money mankind has ever seen, and we remain dedicated to protecting and fostering its growth worldwide.”
He is absolutely correct in that Bitcoin will change our world and that “protecting and fostering its growth worldwide” I have no doubt is important to him, however SegWit2x was not about benefiting the Bitcoin community.
It was about consolidating control over an already hijacked network – to takeover Blockstream and Chaincode who currently control “Bitcoin Core”.
Who is Bitcoin Core?
As with all technologies, scalability eventually becomes an issue, especially if Bitcoin is to make it to mass adoption where there aren’t just millions of users, but billions.
Satoshi Nakamoto addressed this issue early on:
“The bandwidth might not be as prohibitive as you think. A typical transaction would be about 400 bytes (ECC is nicely compact). Each transaction has to be broadcast twice, so lets say 1KB per transaction. Visa processed 37 billion transactions in FY2008, or an average of 100 million transactions per day. That many transactions would take 100GB of bandwidth, or the size of 12 DVD or 2 HD quality movies, or about $18 worth of bandwidth at current prices. If the network were to get that big, it would take several years, and by then, sending 2 HD movies over the Internet would probably not seem like a big deal.”
This answer however did not quell the growing debate within the Bitcoin development community – eventually leading to a split.
A group of programmers calling themselves “Bitcoin Core” wrestled control of the legacy development branch of Bitcoin through social media manipulation, censorship, etc and began to insist that the network could not go beyond 250,000 transactions per day.
They then implemented the SegWit update, which:
- Made transactions reversible by using replace-by-fee.
- Stripped digital signature data that mathematically guarantees one’s Bitcoins are safe with “SegWit”
What these changes actually do is open the door for algorithmic trading.
Hudson River Trading, a company created by the same who started Chaincode Labs and is now responsible for 5% of all stock trading in the U.S., is a high frequency trading firm.
This is why CME is now going to be accepting Bitcoin futures (derivatives) – which will eventually blow “Bitcoin” into oblivion.
SegWit coins are not Bitcoins.
Bitcoin Cash IS Bitcoin
On August 1, 2017 with the implementation of SegWit, a group of longtime Bitcoin users initiated a chain split by:
- increasing the capacity limit of each block (8MB scalable to 32MB with no additional forks necessary)
- removing the replace-by-fee
- reimplementing digital signature data (every transaction contains its own unique digital signature)
Bitcoin Cash is much more aligned with the original design of Bitcoin as laid out in Satoshi’s whitepaper, however because this chain split was initiated by a minority group of miners, they were left with a name change while the SegWit chain retained the Bitcoin name.
On October 13, 2017, Bitcoin Unlimited Chief Scientist Peter Rizun announced that their Gigablock Testnet Initiative successfully mined and propagated the first ever 1GB block.
This clearly demonstrate that Satoshi Nakamoto was once again right and that the Bitcoin network can scale to compete directly on a commercial scale.
Bitcoin Cash is technically the only fork of Bitcoin that represents a natural evolution, while the SegWit updates continue to alter fundamental properties and deviate further from what Bitcoin was intended to be.