Bitcoin announced this past Wednesday that what would've been the digital currency's third blockchain fork of the year, SegWit2x, is postponed indefinitely. SegWit2x, or Segregated Witness 2x, was a proposal for doubling the size of data blocks and changing the way data is stored on the Bitcoin blockchain.
A statement released by team members of the SegWit2x team on the Linux Foundation mailing list stated, "Unfortunately, it is clear that we have not built sufficient consensus for a clean block size upgrade at this time. 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."
Bitcoin is painstakingly slow processing transactions when compared to credit cards. Visa processes 150 million transactions per day, which averages out to around 1,700 per second with the capacity of processing 24,000 per second. Bitcoin, on the other hand, can only complete seven per second.
It takes about 10 minutes to process a Bitcoin transaction and as the number of users on the network grows, waiting times will increase due to the amount of transactions that need to be completed without a change in the actual technology processing them.
With SegWit2x, a third Bitcoin version would have been created with a new branch of the public ledger that logs Bitcoin transactions. The public ledger is known as the blockchain, and creating a new branch of a blockchain is referred to as a "fork."
The Bitcoin blockchain has been forked twice this year. This past August, a group of Bitcoin miners processed a code change which capped the size of blocks on the Bitcoin blockchain at 8 MB. This created two versions of the cryptocurrency: Bitcoin Core, the original, and Bitcoin Cash, a newer version. A few months later, the blockchain was forked again, creating Bitcoin Gold, which aimed to decentralize Bitcoin mining.
The SegWit2x Fork was the result of a lengthy debate within the Bitcoin community regarding the best way to increase the speed of transactions on the network. This past July, the majority of Bitcoin miners voted for the adoption of a solution called "segregated witness." Segregated witness would change the way data was stored on the blockchain, to allow for faster transactions.
Other miners disagreed with the vote and felt the best way to increase speed was by increasing the amount of data each block could hold in the chain. On August 1st, these miners decided not to implement the segregate witness code, and only increased the amount of data each block could store to 8MB. The Bitcoin Cash fork.
There was speculation that the new Bitcoin Cash would fail, but it began trading above $300 per token similar to other cryptocurrencies like Ethereum. However, Bitcoin miners were still not satisfied with its performance and proposed a solution incorporating both sets of miners preference for quicker transactions.
The solution was SegWit2x which makes the amount of data that needs verification in each block smaller. Signature data is estimated to account for more than 60% of data processed in each block, and in theory, smaller amounts of data can be processed faster than larger amounts. SegWit2x would also increase the amount of data in each block like Bitcoin Cash, but only to 2MB instead of 8MB.
The change was supposed to happen at block 494,784, which would have fallen sometime in November. However, six of the lead developers for SegWit2x announced via the Linux Foundation mailing list that the fork will not happen as planned.
It looks like community cohesiveness and unity had much to do with the decision since both sides are still torn on the best method of efficiency. Stay tuned with us here at ModMy as we will update you on any new developments regarding the SegWit2x fork.
Drop a comment below and let us know which method you think is best for speeding up the process of Bitcoin transactions.