Showing posts with label Segwit2x. Show all posts
Showing posts with label Segwit2x. Show all posts

November 17, 2017

Twist in the plans of SegWit2x, Possibility of a Hard Fork looms over

BY Bhushan Akolkar - November 17, 2017 (www.coinspeaker.com)


In a fresh new twist in the plans of SegWit2x hard fork, there is every possibility for the hard fork to go through in the near time.

The much-debated SegWit2x hard fork was being officially canceled last week after several community leaders and a large number of miners withdrew their support due to lack of consensus. As a result, the hard fork plans were completely halted which meant that Bitcoin will not be splitting into two, as projected earlier. However, just a few hours back, there has been the latest twist in this story as Director of Comms @ Coinbase, David Farmer took it to his Medium-blog that there are still a small group of miners who are attempting to go ahead with the hard fork.

Considering the possibility of network instability in such a case and in order to protect the customer’s funds, Coinbase is likely to suspend the buying/selling of Bitcoins 2 am Pacific Time on November 17th, an hour before the fork which is projected to occur between 6am to 8am Pacific Time on November 17th. Once the fork gets initiated and confirmed, all the normal operations will resume afterward. As per the latest information available on blockchain.info, the total number of blocks mined currently shows to 494743 and the SegWit2x is scheduled to take place at 494784 which is pretty close from the existing position.

Earlier this month, Bitcoin prices scaled to new highs above $7800 mark, but however soon after the announcement of the cancellation of SegWit2x, the prices corrected majorly for a week. Later, Bitcoin managed to regain its lost ground and currently, it trades convincingly close to and above $7800 in past 48 hours. Now, as per the most massive bitcoin exchange, Bitfinex, Bitcoin has crossed the $8000 to hit a new record high of $8040 and its latest price on the exchange shows to be $7837.55. Moreover, the word regarding the new twist in the plans of SegWit2x is yet to spread and we think and we think that there is every possibility we might see Bitcoin trading well above $8000 very soon.

In the meantime, just when the plans of cancellation of SegWit2x were announced, Bitcoins first derivate Bitcoin Cash was gaining the limelight as its prices rocketed to new highs above $1900 as a lot of miners shifted to the BCH blockchain.  Bitcoin has recently been hard forked to a new software upgrade in its Difficulty Adjustment Levels (DAA). Many believe that it has created a level playing field for mining activities between the BTC and BCH blockchains.

As the SegWit2x is approaching closer, we believe that there can possibly be a new fresh upward momentum to be seen in the Bitcoin prices. The SegWit2x is expected to improvise a lot of things on the scalability issues of Bitcoins.

November 13, 2017

Rollercoaster Weekend - Bitcoin price Falls From $7,300 to $5,600 and Rebounds to $6,200

By Joseph Young - November 13, 2017 (www.cryptocoinsnews.com)

Within a single weekend, from November 11 to 12, the bitcoin price plunged from $7,300 to $5,600, and recovered to $6,200, in less than 48 hours.


Beginning late Saturday evening, the bitcoin price began to fall from $7,300 to $6,900, as Bitcoin Cash started to record major gains. By Sunday morning, the price of Bitcoin Cash has surpassed $2,900, a new all-time high, while the price of bitcoin plummeted to $5,600.

As such, the rapid surge in the market valuation of Bitcoin Cash and abrupt plunge in the price of bitcoin led to serious market turbulence and uncertainty, as a relatively large portion of investors initiated a sell-off of bitcoin.

Daily Trading Volume Hits $22 Billion


The daily trading volume of the cryptocurrency market achieved $22 billion on Sunday, as the trading volumes of both bitcoin and Bitcoin Cash surpassed $10 billion. Since then, trading volumes have decreased.

According to reports, several major bitcoin investors including bitcoin angel investor Roger Ver sold billions of dollars in bitcoin and allocated the majority of those funds to Bitcoin Cash. As a previous CCN report explained, the sole beneficiary of the cancellation of the SegWit2x hard fork has been Bitcoin Cash, as supporters of SegWit2x migrated to Bitcoin Cash and unified their vision of scaling bitcoin’s on-chain capacity for short-term scaling.

Consequently, the demand for Bitcoin Cash increased in one major region that is South Korea, mostly through Bithumb, the world’s second largest cryptocurrency exchange by trading volume behind Bitfinex. Several cryptocurrency communities in South Korea heavily invested in Bitcoin Cash primarily due to the movement of miners from bitcoin to Bitcoin Cash.

However, traders were made aware that the migration of miners from bitcoin to Bitcoin Cash cannot be permanent, as miners moved when the Bitcoin Cash blockchain was more profitable to mine. Miners are extremely sensitive to profitability, primarily because mining requires a significant amount of resources, capital, and infrastructure.

Hence, in the near future, after a difficulty adjustment on both blockchains, it is likely that miners will move back to bitcoin if it becomes the more profitable blockchain to mine. Because of the tendency of miners to switch between more profitable blockchains, hash power is often not an accurate indicator to utilize to determinate the mid-term growth of a cryptocurrency.

In fact, as Ivie Business School professor JP Vergne wrote, developer activity is usually the most accurate indicator of a cryptocurrency’s price trend.

“We found that the best predictor of a cryptocurrency’s exchange rate is the amount of developer activity around it,” explained Vergne.

What Lies Ahead?


Given that the bitcoin price has stabilized in the $6,200 region and the tendency of bitcoin to rebound to its previous all-time highs, it is likely that the price of bitcoin will soon recover back to the $7,000 region, especially if institutional and retail investors attracted by CME Group and CBOE’s bitcoin futures exchange launch begin to engage in bitcoin trading.

Featured image from Shutterstock.

November 11, 2017

Ethereum continues improvements amid Bitcoin bickering

By Jon Buck - November 11, 2017 (cointelegraph.com)


The cryptocurrency world is in a fuss about Bitcoin and rightly so, with the cancellation of the SegWit2x hardfork and the sudden drop in pricing by nearly $1000 per BTC. However, the price drops and news has kept Bitcoin in the limelight while Ethereum has slowly been making improvements and growing its network.

The second largest market cap coin has seen substantial use cases arise as the ICO world continues to flourish and new ERC20 and ERC223 tokens are created. Recent reports by the Ethereum Foundation indicate that Ethereum processed 44 percent more transactions than the Bitcoin Blockchain, showing the power of the Ethereum system.

Further, the total number of pending transactions for Ethereum has been stable between 30 and 300, while the same figure for Bitcoin has fluctuated anywhere from 39,000 to 47,000.

Quantum protection


The ZK-SNARK protocol, released on the Ethereum platform with the Byzantium hardfork, was quickly criticized by some tech insiders because of its risk of attack from quantum computers. While some had posited that the Ethereum fork would produce a Wall Street adoption boom, the risk from quantum computers has kept adoption steady.

A recent paper by Ethereum founder Vitalik Buterin indicates, however, that a new protocol called the ZK-STARK has been conceptualized in order to protect a full zero-knowledge transaction, even from quantum computing. This protocol relies only on hashes and information theory, rather than the ‘trusted setup’ of its ZK-SNARK cousin.

The upgraded anonymity, while perhaps necessary for such applications as public or fiscal Blockchain transactions, does come at a data cost - from 288 bytes to a few hundred kilobytes according to Buterin. However, in fields where anonymity is paramount, the additional data would provide something that no other system to date can accomplish - fully secure and fully anonymous transactions.

With the rise in transaction volume, the increased speed of transactions, and burgeoning technology use cases, Ethereum may be poised for greater market growth in the coming months.

November 10, 2017

New pump cycle pushes Bitcoin Cash price to $815

JP Buntinx - November 10, 2017 (themerkle.com)


It is safe to assume the Bitcoin Cash price is being heavily manipulated right now. While this doesn’t mean the altcoin is overvalued per se, there are some interesting things happening in the trading department. With a current Bitcoin Cash price of over US$800, someone is clearly trying to push up the value of this altcoin. The latest pump comes on the heels of a previous one which ended not too long ago.

BITCOIN CASH PRICE PUMP CONTINUES


Last week, we saw some major gains for Bitcoin Cash appear out of the blue. There was no real reason for a steep Bitcoin Cash price increase, and there isn’t one today either. Regardless of the sentiment, the price is effectively moving up and doing so at a very quick pace. The people who bought BCH at US$350 two weeks ago will be very happy with their investment, as they’ve more than doubled their money by continuing to hold it today.

Although it remains to be seen if a lot of people resisted the temptation to sell at US$600 last week, the current momentum is pretty spectacular. With the Bitcoin Cash price rising by another 31% out of the blue, this altcoin seems underway to reach a new all-time high. This is all happening while the Bitcoin price is massively struggling for traction, especially now that the SegWit2x hard fork news has caused so much confusion.

It is possible this new Bitcoin Cash price pump is a direct result of the shenanigans involving SegWit2x. People tend to forget that a lot of SegWit2x backers are also the ones advocating Bitcoin Cash the hardest right now. For all intents and purposes, we may be witnessing one of the biggest “politically-oriented coins” in Bitcoin history right now. It is evident the Bitcoin network has some scaling issues to overcome, whereas Bitcoin Cash solved this problem by upping the block size to 8MB directly.


With over US$2.14 billion in 24-hour trading volume, things are looking pretty good for Bitcoin Cash right now. This trading volume is not too far behind Bitcoin’s, which is pretty impressive in its own regard. It is also well ahead of any other alternative cryptocurrency currently in the top 10. The bigger question is how much of this volume represents genuine interest in BCH rather than speculation. That number is probably a lot lower than what some people may proclaim it to be.

As is pretty much always the case, Bithumb has taken care of almost half of all BCH trades over the past 24 hours. Bitfinex and Coinone round out the top three, although Korbit and HitBTC are not too far behind. It is evident South Korea has solidified its position as a global cryptocurrency trading powerhouse these past few weeks. Bithumb especially is generating a lot more volume than most Chinese exchanges were ever capable of.

In the end, the lingering question is whether or not the Bitcoin Cash price momentum can be sustained for a long period of time. We have now seen two extended pumps in quick succession, which further confirms there is nothing natural about this growth whatsoever. There are still a lot of holders who never sold their coins since day one. Once these people start unloading BCH, things will get very interesting, to say the least. It is a great altcoin for some quick profits, though; that much is certain.

Jdebunt
JP Buntinx is a FinTech and Bitcoin enthusiast living in Belgium. His passion for finance and technology made him one of the world's leading freelance Bitcoin writers, and he aims to achieve the same level of respect in the FinTech sector.

Bitcoin reaches end of an era - Expert Blog

By Rhett Creighton - November 10, 2017 (cointelegraph.com)


Expert Blog is Cointelegraph’s new series of articles by crypto industry leaders. It covers everything from Blockchain technology and cryptocurrencies to ICO regulation and investment analysis. If you want to become our guest author and get published on Cointelegraph, please send us an email at mike@cointelegraph.com.

Calling off 2MB blocks marks the end of a 3-year effort between different political groups inside Bitcoin trying to come to a compromise. Core developers may feel like they have won the battle, but a silent majority will leave quietly, selling their coins and driving down price over time.

At the same time, it marks the beginning of a new age in human history. One where individuals have a freedom of choice, and a freedom of exit.

”New York Agreement” called off


I was fully expecting Nov 16th to be an apocalypse for Bitcoin. Over 80% of miners were signaling support for 2MB blocks, and several hundred of the largest Bitcoin exchanges and companies had signed an agreement to support the block size increase. Despite businesses planning for 2MB blocks, much of the Bitcoin user community and core development team was prepared to reject the software change, which would split the Bitcoin network in a most disruptive way.

The split would have been a disaster for Bitcoin. However, the price of Bitcoin has been reaching new all-time-highs because uninformed investors have been conditioned to think that a fork in Bitcoin means that you get free coins. That was the case with Bitcoin Cash, but the chain split planned for Nov 16th would have been very different.

Under the SegWit2x split scenario, I don’t think it would have been possible for anyone to agree which was the “real” Bitcoin chain anymore. Large companies like Coinbase had agreed to support both chains. The 2MB chain planned to launch with no replay protection for users, which would have caused massive confusion and loss of funds. As the first clean fork of Bitcoin, with a clear plan and goal of being business-friendly, I expected Bitcoin Cash to be a big winner. The price of Bitcoin Cash has gone up nearly 100% in the past two weeks with many investors speculating on a “Cashening.”

Bitcoin will lose market share


Joseph Poon, inventor of Bitcoin’s still-in-development lightning network, said recently:

“When a party starts to suck, you leave. You can try to fix it, but the cleanest solution is to just get out… A lot of Blockchain is increasing the freedom for individuals, and part of that is having the flexibility to leave, and to make the choices that you want to, at any point in time.”

 Two large factions of the Bitcoin ecosystem reached an impasse. For individuals and corporations who no longer find the transaction fees and scalability acceptable in Bitcoin, the simplest solution is to leave. Those individuals will dump their $7,500 (down to $6,600 at press time) Bitcoin on first time buyers as they slowly get out.

“Dumb Money” pouring into Bitcoin


People are exuberant about the price of Bitcoin increasing to nearly 7x the price it was at the beginning of the year. Real-life meetups are full of new faces and first-time investors. The Bitcoin subreddit is full of people cheering each other on about buying their first 0.1 BTC and expecting a 10x annual ROI.

One of the bullish pieces of news driving the mania is that the CME Group plans to add Bitcoin futures this year, potentially making Bitcoin available to billions of dollars worth of new investors. However, Wall Street hedge fund investors are not suckers. Even if a hedge fund wants to buy into Bitcoin, they might try to short it first to drive the price down and shake out weak holders. If they can cause a few billion in losses from the people who bought the top by shorting it all the way down to $3000 (where it was a few months ago), they will.

Blockchains: New kind of entity


Blockchains are a new kind of entity, much in the same way that corporations with shareholders were a new kind of entity invented 400 years ago. Today, corporations are able to lobby Congress and have many of the same rights as humans. We will see Blockchains also gain access to these rights in the near future.

I fully expect the market cap of all crypto tokens to increase exponentially over the next few years, but this is not a winner-take-all scenario. Today, mainstream media financial advisors are touting Bitcoin as “the new gold,” but it can’t ever be that. To get a sense of how it’s different, imagine a universe where anyone could create a new kind of metal with essentially the same properties of gold.

Expecting Bitcoin to have the majority market share of Blockchains in the future is about as ridiculous as expecting the East India Company to be more valuable than all other corporations combined today.

Demand for Bitcoin and rise of crypto-ruble


Through much of 2014–2015, the price of Bitcoin declined. However, in 2016–2017, we started to see some larger demand for Bitcoin driven by ransomware, Ponzi schemes like “MMM,” Chinese citizens evading capital controls, and a means of transferring value into other Blockchain tokens (“ICOs”).

Russia has recently announced that they are looking into developing their own “crypto-ruble.” The crypto-ruble will feature a 13% tax into and out of paper fiat if the redeemer is unable to provide documentation of the transaction history.

Because Russia will be much more centralized and efficient than Bitcoin at processing transactions, I expect the crypto-ruble to be an attractive alternative to Bitcoin for ransomware, people escaping hyper-inflation, and Chinese citizens circumventing capital controls (especially in the event of a Bitcoin bear market).

The Chinese government shut down the BTCC exchange last month with rumors that they may pursue a crypto-yuan as well. It’s clear that some very big players are ready to enter this market, and they aren’t interested in sharing their money with Mr. Nakamoto.

Disclaimer: The views and interpretations in this article are those of the author and do not necessarily represent the views of Cointelegraph.

Rhett Creighton
helped create the Zclassic and Zen forks of Zcash (Over $50M market cap) and more recently, Whalecoin. He contributed to the Bitcoin Core test suite and is an MIT alum.

Bitcoin Cash surges as businesses abandon legacy BTC

By Kai Sedgwick - November 10, 2017 (news.bitcoin.com)


Bitcoin cash is enjoying a new lease of life as major figures throw their weight behind the chain. In the wake of the abortive Segwit split, neither bitcoin nor B2x has prospered, with the latter failing to materialize and the former dropping below $6,800 for the first time in 10 days. BCH, meanwhile, hit $866 earlier today.

All Aboard The BCH Express


As the elation, anger, and acrimony over Segwit2x has started to settle, focus has returned to the seemingly intractable problems of bitcoin scaling and transaction fees. Given the difficulty of attaining consensus for developments of the bitcoin network, many have grown frustrated by the stalemate, with widespread Segwit adoption and Lightning Network implementation still months or years away.

With bitcoin currently unsuitable for small transactions due to high fees, various businesses and public figures have expressed their preference for a cryptocurrency more suited to everyday use. For some, this has meant looking to the world of altcoins, where the likes of Litecoin and Dash beckon. For those keen to stick with the bitcoin brand, however, bitcoin cash looks increasingly attractive.

One member of the Openbazaar team tweeted:

"Hearing lots of great things about @BitcoinCash $BCH today. Many developers and businesses seem better aligned with the vision now that 2x has failed".

The team running the P2P marketplace have every reason to be extolling the virtues of bitcoin cash, having announced that they’ll be accepting BCH on account of its cheaper fees along with zcash. As businesses have wrestled over what to do with a legacy bitcoin that’s becoming increasingly un-transactable, the BCH team have wasted no time in wooing defectors, stating:

"BTC’s utility continues to decline. Watch as businesses adopt BCH".

One public figure who has thrown his weight behind BCH is Pirate Party founder and bitcoin maverick Rick Falkvinge, who declared: “With recent developments, I’m putting all available dev resources to retool my software for #Bitcoin Cash. I suspect I’m far from alone.” He later added: “I’m moving my development effort to Bitcoin Cash, as Bitcoin Legacy now has hit a brick wall and needs to be dropped like a bad habit. I have no real reason to move the coins.”

One Coin to Rule Them All


The Bitcoin Cash market has surged over the last 24 hours, with volume exceeding $2.5 billion, 57% of which was trading against the Korean won. Much of the fevered interest in BCH will simply have been market sentiment, fueled by the growing consensus that the legacy bitcoin chain is ill-equipped to handle growing volume. It would be speculative at this stage to suggest that BCH is gearing up for its own version of The Flippening, when Ethereum believers thought their coin might actually overtake bitcoin to become The One True Coin.

Make no mistake though, if BCH’s most ardent supporters have their way, not only will bitcoin cash steal bitcoin’s market cap eventually but it will also steal its name. In the wake of the Segwit2x furore, there were hopes that the in-fighting which had driven a wedge into the bitcoin community would cease and work could resume on infrastructure improvements. Instead, the BTC/BCH debate has been ramped up, with supporters of both chains adamant that theirs is the best bitcoin.


Bitcoin legacy’s decentralized nature is both its greatest strength and its greatest weakness. The BCH team is wasting no time in rolling out network upgrades and implementing a clear roadmap. More than 1,500 businesses are already accepting bitcoin cash, a modest figure but one that is rising steadily.

Images courtesy of Shutterstock, Coincodex.com and Bitcoin Cash.



Kai Sedgwick

Kai "Segwit" has been assembling words for a living since 2009 and fascinated with Bitcoin since 2013. He's previously written white papers for blockchain companies and is particularly interested in P2P exchanges and DNMs.

‘MoneyBall’, ‘The Big Short’ author is glad he kept his Bitcoin

By Rebecca Campbell - November 10, 2017 (www.cryptocoinsnews.com)


An American non-fiction author and financial journalist has said that while he owns some bitcoin he ‘doesn’t completely get it.’

The author in question is Michael Lewis, author of best-selling books behind hit movies such as The Blind Side, The Big Short, and Moneyball. How much bitcoin does he own? A mere $378 worth. Not exactly a huge sum by any means, but it’s a lot more than what he originally started with.

A few years ago, Lewis was gifted $5 worth of bitcoin. At the time he was considering writing about the currency and wanted to learn more about it. By doing so he ended up spending half a day with bitcoin enthusiasts in Silicon Valley, writes Yahoo! Finance.

His main concern, though, was whether or not he would be able to spend the currency. The people he was with told he could and helped set him up with a digital wallet. They then proceeded to take him out and attempted to buy a cup of coffee with the digital currency in Palo Alto.

Lewis said:

"It was a disaster. Of course it didn’t work. I said, ‘Why don’t you call me when I can buy something with bitcoin,’ and I kept the $5 on my phone".

Since then bitcoin’s value has experienced a surge in value. At the beginning of the year the cryptocurrency was worth $1,000. Now, 11 months later, it’s trading just under $7,200, according to CoinMarketCap. At its highest, the digital currency reached $7,800 yesterday after the news that the controversial SegWit2x protocol upgrade had been suspended.

However, the coins that Lewis owns remain in the same digital wallet that was set up for him, at a rate of $378.

He adds:

"The bitcoin is now more valuable than my phone".

In an interview with TheStreet, he also expressed the view that while he gets the concept of the blockchain, he ‘doesn’t completely get bitcoin.’

Nowadays, though, with the coin’s value increasing more people are finding ways as to how they can spend the currency for day-to-day purchases. Japan is one example, which has embraced the market and is accepting the cryptocurrency for purchase payments. Elsewhere, homeowners selling their homes are now accepting cryptocurrencies such as bitcoin as payment options in Miami and London.

It may not have been easy to use bitcoin to pay for things a few years ago, but that’s certainly changing as its value continues to rise.

Featured image from Shutterstock.

November 09, 2017

SegWit2X - Rogue fork announced, Raises suspicions of trolling

By Christine Masters - November 09, 2017 (cryptovest.com)


Officially, the November hard fork was called off. Unofficially, a rogue blockchain has been announced by self-presented miner group BitPico.

The Bitcoin hash rate has been dwindling - and the account of BitPico has shown up, claiming ownership. In a Microsoft Cloud message, BitPico stated that a hard fork is coming anyway, despite the cancellation from the project's leaders sent days ago. 

In a categorical tone, BitPico wrote: 

"We are carrying out the fork regardless as everything is set in motion. Backing down the difficulty right now is a strategy. Wonder why 30% network hash-rate disappeared?  It’s ours; the miners that will continue what is set in motion... A handful of humans cannot stop what they have no control over..."

The Bitcoin hash rate has bucked the trend, expecting a record downward adjustment in difficulty in just a few days. This means that after the hard fork, the new blockchain created would operate at a low difficulty for at least 2016 blocks. 

But the recently created BitPico account, presumably for a group of miners, claimed a much lower hashing power in an earlier notice. Theories on the behavior of BitPico ranged from mere trolling to an attempt to manipulate the B2X futures markets. B2X futures dropped dramatically after the fork cancellation, losing more than 80% of their valur.


The Bitcoin difficulty will probably adjust downward by 30%, an unseen correction after the difficulty rose rapidly in the past months. 

US-based exchange Coinbase will be monitoring the proposal for a rogue hard fork, but so far abstains from a statement: 


Bitcoin enthusiast and founder of Civig Vinny Lingham also noted the potential rogue hard fork: 


At the moment, no one is certain if BitPico is a real entity that in fact commands the missing hashing power and slowed down the Bitcoin blockchain. The entity is related to a low-activity GitHub repository, and some believe the move is merely a distraction tactic. 

But since forking Bitcoin is easy, it is not impossible that an actual SegWit2X coin would be created. This time, however, it would not be able to strangle the Bitcoin chain.

The other hypothesis would be that the lowered hashing power would flow into Bitcoin Cash, which will soon have a smoother difficulty adjustment algorithm. 

The official cancelation of the SegWit2X hard fork for the foreseeable future managed to calm down the markets and caused a rally in altcoin prices.

November 08, 2017

NO2X: Next week’s Hard Fork has been “suspended” due to a lack of consensus

By Aaron van Wirdum, Staff Writer - November 08, 2017 (bitcoinmagazine.com)


There will almost certainly be no Bitcoin hard fork next week: the main organizers behind the SegWit2x project have “suspended” their efforts.

In an email to the SegWit2x mailing list, one of the main organizers behind the project, BitGo CEO Mike Belshe, explained that the proposed hard fork has not been able to gain sufficient consensus to proceed:

“Although we strongly believe in the need for a larger blocksize, 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.”

The New York Agreement was originally forged between a group of Bitcoin companies in May of this year. An initiative by Digital Currency Group CEO Barry Silbert, the project — later dubbed “SegWit2x” — was to combine activation of the Segregated Witness soft fork with a hard fork to double Bitcoin’s block weight limit. With Segregated Witness activated on the Bitcoin network this past summer, arguably helped by the SegWit2x project, the hard fork was scheduled to take place next week.

However, the hard fork part of the New York Agreement was always controversial for a number of reasons. As a result, a growing number of signatories dropped out of the agreement over the past weeks and months, while developers, user communities, public polls, future markets and more all indicated limited support for the effort. And as the hard fork date drew closer, it become increasingly clear that SegWit2x would in fact spawn a new currency rather than constitute an upgrade of the Bitcoin protocol.

And this was never the plan, Belshe wrote:

“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’s email was also signed on behalf of Xapo CEO Wences Casares, Bitmain CEO Jihan Wu, Bloq CEO Jeff Garzik, Blockchain CEO Peter Smith and ShapeShift CEO Erik Voorhees. In a separate blog post published just before Belshe’s email, BitPay CEO Stephen Pair also called for cancelation of the hard fork.

While the New York Agreement was signed by even more companies (and some individuals), and anyone can still deploy the hard fork, it is unlikely that anyone will proceed with the hard fork in any meaningful way.

Belshe does, however, note that a hard fork to increase Bitcoin’s block weight limit might be needed in the future, writing:

“As fees rise on the blockchain, we believe it will eventually become obvious that on-chain capacity increases are necessary. When that happens, we hope the community will come together and find a solution, possibly with a blocksize increase.”

November 04, 2017

SegWit2x a Chain Split, ‘Not a Blockchain Upgrade’ - NYA Signatory Bitso

By Josiah Wilmoth - November 04, 2017 (www.cryptocoinsnews.com)


Another signatory to the New York Agreement (NYA) is having second thoughts about SegWit2x.

Daniel Vogel, co-founder and president of Mexican bitcoin exchange Bitso, sent an email to the SegWit2x mailing list on Thursday expressing hesitancy about the upcoming hard fork that is scheduled to activate in approximately two weeks. Vogel’s chief concern is that although the SegWit2x codebase is written as an upgrade, the hard fork is effectively a blockchain split.


“I would urge everyone to rethink the S2X code from a technical perspective. The code base was written as an upgrade to Bitcoin. I believe there is enough hard data out there to make it clear that S2X is no longer an upgrade.”

He noted that although the majority of the hashrate continues to signal for the hard fork, several pools have either withdrawn support or declined to support it in the first place and others have wavered in their commitment to mine the SegWit2x blockchain.“When do we stop and rethink?,” he asked. “When we get to less than 50% hashing power?”

He also pointed to the fact that no bitcoin liquidity providers — bitcoin exchanges, for instance — have stated they will abandon the incumbent blockchain, which is what happens when a hard fork is truly a blockchain upgrade.

"I ultimately think this is about users. We had ZERO users asking us to keep support for the now dead pre-Byzantium [ethereum] chain,” a hard fork that took place last month. “We have tons of users asking us to keep support for their ‘core’ BTC.”

Vogel said that Bitso signed the NYA to help activate SegWit but that the agreement has failed in its attempt to build consensus around SegWit2x.

“What’s relevant is that NYA has failed to bring the community together and provide a safe mechanism to upgrade Bitcoin as it had intended to do,” he continued, adding that “when asked about signing the NYA I definitely didn’t agree to it in order to further divide and cause mayhem, which is what NYA has achieved.”

Bitso is not the first NYA signatory to revoke its support for the agreement. Although SegWit2x project lead Mike Belshe has said “Things are looking good” ahead of the hard fork’s scheduled activation date, a growing list of businesses — as well as mining pool F2Pool — have reversed their support for the contentious hard fork for various reasons, ranging from a lack of replay protection to a dearth of support from their customers and the most active bitcoin developers.

“This is not a blockchain upgrade,” Vogel concluded at the end of his email. “This is a chain split and we are failing to address legitimate safety concerns for the users of this network.”

Featured image from Shutterstock.

Posted by Josiah Wilmoth

Josiah is a former ancient and medieval literature teacher. He has been writing about cryptocurrency since 2014, and his work has been cited in Business Insider, NPR, and Yahoo! Finance. He lives in rural North Carolina with his wife and son. Email him directly at josiah.wilmoth@cryptocoinsnews.com.

October 25, 2017

Bitcoin Forks or Bailouts? India gives 1.3% of GDP in free cash to banks

By William Suberg - October 25, 2017 (cointelegraph.com)


Bitcoin holders are not the only ones getting free money this quarter as India prepares to inject $32 bln into its banks.

While exchanges in the increasingly important Bitcoin economy announce their perspectives on the Bitcoin Gold and SegWit2x hard forks, legacy finance is getting a “game-changing” government bailout to curb bad loans.

As CNBC reports quoting Goldman Sachs forecasts, India could see economic growth from the giant remedial package, which equals 1.3 percent of the country’s GDP.

GDP growth could rise “up to five percent” a year after the injection, the bank states.

India’s domestic financial institutions have been worrying investors increasingly in the past few years.

Earlier this month, prior to news of the cash surfacing, rating agency Fitch sounded the alarm about the future if banks were not more strongly recapitalized.

"Fitch believes the government will have to pump in significantly more even on a bare minimum basis (excluding buffers) if it is to address the system-related risks of a huge NPL (non-performing loan) stock, weak provision cover and poor loan growth," it said.

Meanwhile, Aswath Damodara, New York University’s so-called ‘Dean of Valuation’ has said he considers Bitcoin a currency and that he is “OK with” its price being at or just over $6,000.

"I think the better path for Bitcoin is to actually make it a digital currency, a currency that you and I can take on our travels and use actually to buy stuff and sell stuff. If that happens, then I'm OK with the pricing," he told CNBC Tuesday.

October 21, 2017

Money at risk? Mobile wallets become new battleground in Bitcoin fork debate

By Alyssa Hertig - October 21, 2017 (www.coindesk.com)


Mobile bitcoin wallets users might not realize it, but their money might be at a heightened risk this November.

While advertised as a tool bitcoin users can tap to achieve an experience more akin to a conventional financial product, mobile bitcoin wallets today send transactions to the bitcoin blockchain, though in a way that differs from the default wallet options. But come November this construction could cause turbulence, because that's when the bitcoin protocol is aiming to undergo yet another major change to its software.

Following this summer's activation of the code upgrade SegWit, a group of businesses are now seeking to trigger a hard fork to increase bitcoin's block size and further expand its transaction capacity. The code, part of a larger upgrade called Segwit2x, could lead bitcoin to split into two (again), that is, if not everyone decides to support the upgrade.

Still, the difference is that, unlike bitcoin cash, Segwit2x's developers are doing everything they can to keep all bitcoin users on the same blockchain.

Segwit2x lead developer Jeff Garzik told CoinDesk:

"The design goal of Segwit2x – just like [the latest] ethereum fork – is to upgrade bitcoin, not create a new currency."

To do so, developers backing the project also have made a couple of key (if controversial) design decisions that have to do with maintaining compatibility with "simplified payment verification" wallets, the technical term for smartphone-based bitcoin wallet applications.

But developers argue that there are pros and cons of how they are trying to accomplish this.

For one, it might not exactly be safe for mobile wallet users to make transactions immediately after the hard fork is enacted.

Attack resistance or convenience?


The first design decision is omitting so-called "replay protection."

A bit of a political term, it's meant to describe what happens when a blockchain splits in two, as users suddenly have equal value on both blockchains. This means that when users move tokens on one blockchain, the tokens also move (or "replay") on the other.

But this isn't visible to people who might not know that they have money on two networks during a network split. Worse case: users might lose some of their money and not even notice.

"It becomes unpredictable what money you're moving and when," Bread Wallet CMO Aaron Lasher explained in conversation with CoinDesk.

Since not everyone agrees with the Segwit2x hard fork – some are even going as far as to write up manifestos in opposition – it's likely to split into two competing networks, and this could be confusing for general users.

However, Segwit2x developers have a reason for leaving replay protection out: to keep Segwit2x compatible with SPV mobile wallets.

"'Replay protection', as you call it, splits the chain. It simply doesn't make sense. You'd suddenly be breaking [more than 10 million] SPV clients that otherwise work just fine. It is a goal of Segwit2x to help avoid this," BitGo CEO Mike Belshe wrote in an email debate between developers of the project.

In other words, replay protection would cause inconvenience for mobile wallet users who want to shift over to the Segwit2x blockchain, so Segwit2x developers don't plan on adding it.

Hard fork decisions


Mobile wallets are the subject of debate in another area as well.

Many providers of this wallet option, such as Electrum and Bread Wallet, rely on SPV. This does away with need to hold a full copy of the blockchain, making the data far easier to store on storage-strapped cellphones.

But, they have some drawbacks. (Coinkite co-founder CEO Rodolfo Novak went as far as to quip that "the 'V' in SPV stands for Victim.")

As implemented today, SPV wallets will automatically follow whatever version of bitcoin has the most miners backing it. So, if bitcoin splits into two, and Segwit2x attracts more computing power than the legacy bitcoin chain, then all of the SPV wallets will follow along. That's by design.

But some mobile wallet providers aren't so happy about this, as it's hard to explain to users what's happening.

"It's really tough for us because we are so direly affected," said Lasher.

This also has the potential to lead to some technical problems. If there are two bitcoins, mobile wallet software might get confused about which chain to follow, especially if miners switch between blockchains over time (as happened in the aftermath of the bitcoin cash fork).

"It could confuse SPV clients and result in clients switching back and forth between chains, making them lose money depending on which chain has more work at what point," Chaincode engineer Matt Corallo said.

Novak painted another scenario.

"With SVP you don't know if the node you are connected to is lying to you. For example, a Segwit2x node can spoof as a [bitcoin] node [on the other chain], this means that without replay protection your wallet may spend the funds in the wrong chain and lose them on the correct chain," Novak told CoinDesk.

Overall, developers paint an assortment of "if-then" scenarios. Lasher admitted as much, noting that it's unclear which ones will actually play out.

"It's really this decision tree of many, many things that can happen. And all of them are on the scale of somewhat annoying to downright dangerous," he said, adding that Bread Wallet plans to encourage users to stop making transactions during the hard fork, "if they can manage."

A solution?


But with disarray at the application layer, protocol developers have been arguing about how best to handle what might come.

Bitcoin contributor James Hilliard, well-known for helping to prevent a bitcoin split earlier this year, suggested a change to the Segwit2x codebase that he argues would give mobile wallets more control over the which bitcoin they ultimately land on.

Again, though, Segwit2x developers argue that this change would make it more difficult for users to transition to a blockchain with a block size increase – something they believe many users want to do, so that they can make cheaper transactions. (Garzik argued that is the most "neutral" metric for determining which chain SPV wallets should follow.)

But, again, others believe that this will confuse users and perhaps even lead those that are unaware of the situation to lose money.

Some developers even agree that there needs to be a block-size parameter increase, but simply disagree with some of Segwit2x's design decisions.

As such, the statements highlight that, while often portrayed as black and white, the scaling argument still has its shades of gray.

Lasher concluded:

"There might be some merits to a block-size increase. But we don't agree with the current way it's being pushed through."

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which helped organize the Segwit2x proposal and has an ownership stake in BitGo.

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