Hi guys, a lot of people have been worrying about the future of Bitcoin after August 1st, will Bitcoin be split like Ethereum. What is BIP 148? So here is my short explanation on the subject.
The Problem
Bitcoin transactions are facing 2 issues: long transaction time and high fee
The time to confirm a transaction is directly correlated to the size of the block at current time. If you want a faster transaction, you need to pay higher fee. This leads to the problems above.
The Solutions
1, SegWit - Segregated Witness
SegWit is a process by which blocks on a blockchain are made smaller by removing signature data from Bitcoin transactions. The speed of transaction will be increased.
This is a soft fork which means there will not be a split in Bitcoin.
However, this is a temporary solution because the size of the block doesn't change and eventually will be filled up again when the exchange volume gets much higher.
BTC Core (Developers behind Bitcoin) backs this solution.
2, BTU - Bitcoin Unlimited
BTU aims to increase the size of the block. This will change Bitcoin's source code resulting in a hard fork and there will be a split.
This solution is long term.
However, like in the past, the split in Ethereum resulted in decrease in value. This time might not be different.
This solution is backed by lots of bitcoin miners including Wu Jihan (Bitmain, Antpool)
BIP 148
Bitcoin Improvement Proposal 148 is an User Activated Soft Fork (UASF)
BIP 148 requires miners to send a signal to be ready with SegWit.
On 01/8, all nodes with BIP 148 activated will reject blocks without SegWit ready signals.
What will happen?
- If all miners send ready signal before 01/8. BIP 148 will not be nessesary.
- If miners do not send signal, there will be a chain split.
- If most miners send a signal, there will be a chain slit but eventually will be 1 chain
- If BIP 148 doesn't happen because most people do not agree. There will be a BIP 149 with a more agreeable solution (might happen in the end of 2018)