As of block 479707, BIP 141 (Segregated Witness) has officially locked in, and is scheduled to activate in this activation period, the next 2016 blocks. In other words, the Bitcoin network is expected to be running SegWit by August 21st, at around 22:20 GMT.
Hooray that Bitcoin will finally scale, right? Don't celebrate just yet. To find out why keep reading, but first...
A Quick Rundown
For those that are not up-to-date with the latest Bitcoin news, I will explain some basic terms that I will be using throughout the post. Feel free to skip this if you don't need it.
SegWit: Segregated Witness is the name used for the proposed soft fork by Bitcoin Core developers that solved transaction malleability, thereby increasing transaction speeds and paving the way for second-layer solutions such as the Lightning Network.
Lightning Network: An off-chain second-layer solution that enables instantaneous and lightning fast transactions with minimal fees that settle on the Bitcoin network.
Bitcoin Cash: A fork of Bitcoin which has 8MB blocks and does not have SegWit. Supports on-chain scaling only.
SegWit2X: A proposal that enacts the original SegWit proposal, as well as a 2MB hard fork 3 months after the activation of SegWit. It currently has 92% of miner support and is widely regarded as a "compromise".
The Meaty Part
With SegWit due for activation, all that's left now is the 2MB hard fork which will happen sometime in November, and then everyone will be happy, right? Not really.
From the beginning of the SegWit2X proposal, the majority of Bitcoin Core developers fiercely opposed it citing that a block size increase would require much more coordination and that 3 months time is "too rushed", in addition to opposing bigger blocks in general due to centralization issues.
Their rejection of SegWit2X is made more apparent by the recent Github pull request, which will make the new Bitcoin Core version (0.15) to disconnect btc1 (SegWit2X full node wallet) nodes. This action basically confirms that we are heading for yet another split in November. [Source]
Many disregard this issue, claiming that it will be just like the Bitcoin Cash fork. But here's the thing, over 92% of miners are signalling their intention to support SegWit2X. Not all of them will go through with the 2MB hard fork of course, but let's focus on what is happening right now. Furthermore, many important Bitcoin services support it, as well as notable developers such as Gavin Andersen, former lead Bitcoin Core maintainer and Jeff Garzik, former Bitcon Core developer. [Source]
What all of this means is that support of SegWit2X is far greater than that of Bitcoin Cash, and thus the split could seriously divide the Bitcoin community, having a catastrophic impact on the Bitcoin ecosystem in general.
Arguments
These are arguments that are made by both sides to help you understand the situation. I am not making these arguments nor do they represent what I may or may not think. They are food for thought and therefore you need to do your own research and come up with your own answers.
SegWit2X does not cater to anyone
Proponents of SegWit are getting SegWit in Core nodes and proponents of big blocks now have 8MB blocks with Bitcoin Cash. Who does SegWit2X cater to now?
Bigger blocks are a danger to decentralization
An increased block size increases the operation costs of running a full node, thus enabling fewer people to run full nodes and making Bitcoin more centralized. We must seek second-layer scaling solutions to maintain a decentralized network.
Bigger blocks are not a danger to decentralization
HDD space is extremely cheap nowadays, with 2TB hard drives costing no more than $80, and 10TB hard drives being available to consumers. Technology is improving fast and it can catch up with Bitcoin's demands.
Bigger blocks are what Satoshi envisioned in the whitepaper
Bitcoin does not need a scaling plan that involves second-layer solutions because it had a scaling plan from the beginning. The 1MB block size limit was said by Satoshi himself to be temporary.
Wrap-Up & Where I Stand
Bitcoin has overcome a major roadblock, and will come across another one in November. The Bitcoin Core developers do not agree with so-claimed "rushed" SegWit2X and there will most likely be a third split, with support potentially being much more equally distributed between the two coins.
In the end, people will choose. The one true Bitcoin will survive and the other will stagnate. I will support the winner, the one the community ultimately chooses. But until then, I will maintain a neutral stance as I hopefully managed to do in this post, and I encourage you to do the same.
Interanvil.
*Follow me for more thoughtful and objective posts on cryptocurrency and technology like this. Make sure to upvote and resteem this post if you liked it.
While you're at it, check out this post on Bitcoin Cash.