Dear Steemit Friends,
There has been a long and drawn-out debate on the direction Bitcoin should take and recently it seems a direction has been mutually agreed upon by both miners and developers which has helped to restore confidence in Bitcoin as a whole. For a long time there has been much debate on how to scale and improve Bitcoin with not much traction in the way of advancement. This has let other currencies steal a lot of the spotlight from Bitcoin and question its position as the #1 currency. Although this aspect is still under debate, at least we are starting to see some traction in improving the technology behind Bitcoin.
Recently I'm sure most of you have heard the news about BIP91 Locking in securing at least the direction for the activation of technology that will help improve the speed and efficiency of Bitcoin transactions. The news itself has restored investor confidence and again put Bitcoin at the forefront of most crypto-currency news. That is great-and-all, but what does that really mean?
For some of you (those with the knowledge and skills to understand) it is the start of something much bigger. For the rest of us - those who don't understand the first thing about coding, the technology, and the terms for which this change is all about - It's assumed this is good! At least from a price and investment perspective. From a perspective of percentages, it looks as though some traction has been made since the move has signaled over 97% support which was required to lock in this update.
I have been reading many articles to try and better understand what this update means. I have also joined many discussions to help try to explain to us what this update is and what it really means and what I have gathered is the following.
BIP 91 does two things:
It makes it significantly easier for the network to adopt Segregated Witness (SegWit), a backward compatible upgrade that fixes transaction malleability and clears the path for off-chain solutions like Lightning Network.
If activated by July 31, which was completed, BIP 91 will supersede BIP 148, a proposal that poses a risk of causing the network to split.
BIP (Which stands for Bitcoin Improvement Proposal) 91 is a soft fork which implies that miners will eventually support the activation of SegWit indirectly. It basically lowers the threshold to activate segwit by lowering the threshold to lock in BIP141 which activates segwit, which was released over a year ago. This means the threshold to activate Segwit will be 80% of mining support rather then the original 95% which was difficult to achieve.
Miners now have a grace period of about 2.3 days (336 blocks) to update their systems. Any block that is mined after that period not signaling for segwit will be considered invalid and rejected.
During the next Bitcoin difficulty adjustment (every 2016 blocks) at least 80% of the miners need to lock in and signal the actual Segwit activation. After that, another grace period happens until it is officially activated. The flow chart below from Coindesk explains what the timeline looks like.
The overall goal is to increase the block size and speed up transaction times. Below is a humorous video that explains segwit in easier terms.
Below is some data on where we are today in terms of activating Segwit. BIP 91 has already locked in and once the grace period is complete, the next Milestone is to lock in BIP 141 which is to activate Segwit. As long as a majority of hash power enforces BIP 91, this majority should eventually in turn activate SegWit on all SegWit-ready nodes by mid-end of August.
Source: Coin Dance - In case you want to keep up-to-date
A split may have initially been averted, however this does not mean we are near or guaranteed that a split wont happen. The majority will still need to signal for Segwit activation when the time comes and as we all know things are not set in stone until they happen.
As Always, I appreciate your continued support.
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Image Sources: [1] [2]