This is an introduction to the discussions that are taking place at Bitcoin and to the impasse in which technology is at the moment. And now? What will happen to my coins? Segwit or Unlimited? Softfork or hardfork? The text is divided into two parts, the first one explains the current situation, and the second a summary of what may happen in the future.
Present: what is the impasse that is occurring with Bitcoin?
At the beginning of Bitcoin's development, technology programmers put a transaction limitation on avoiding network flooding with payments created just as dirt. The idea was to avoid what happens to spam e-mails, which hinder our e-mail boxes and congestion the internet. This was done by putting a ceiling on the amount of information trafficked in the Bitcoin network. Today, all transactions within 10 minutes can not add more than 1 megabyte. This in practice limits the number of possible payments in the Bitcoin network to 3 or 4 per second. With the increasing use of technology, transaction queues are beginning to occur because of the 1MB limit. There are several technical solutions to increase the number of transactions. Transactions. The discussion about what will be done is causing discord in the Bitcoin world. And this has affected its price and even expectations about the future of digital currency. Among all possible solutions, there are two that are polarizing the discussions and which are summarized below:
Solutions to the impasse: Segwit or Bitcoin Unlimited?
- Segregated Witness (SegWit) - This network capacity enhancement solution is supported by Bitcoin's top programmers, known as Bitcoin Core, and by most digital coin companies, such as MercadoBitcoin.com.br in Brazil and the largest bitcoin bags on the planet. In putting in Bitcoin a new technique to reduce the size of transactions, SegWit. It maintains the size of the transactions block, but decreases the size of the payments, making them almost double in the same 1MB. SegWit, in addition to increasing the capacity of the Bitcoin network, corrects some of its limitations, the main one It is called malleability of transactions. Removing the malleability of transactions makes innovations such as Lightning NetWork, Confidential Transactions and Schnorr signatures easier to incorporate into Bitcoin. The main criticism of SegWit is its implementation complexity. SegWit would be included in the Bitcoin via softfork, as described below.
- Bitcoin Unlimited - Bitcoin Unlimited is the solution supported by the great miners of Bitcoin and some influential people like Roger Ver, known as Bitcoin Jesus. This solution basically consists of taking the 1MB limit of the blocks and giving the miners the ability to define the size of According to their economic interests. That is, the size of the blocks gains flexibility. As in theory the interest of the miners is that the price of Bitcoin increases in the long term, their decision would always be that it brings more benefits to Bitcoin. In the following section "What to expect from the next chapters", you can see that this is not so. Short-term benefits may overlap with long-term mining decisions. The main criticism of this solution is that it has not been tested in any environment, and that its programmers have made some mistakes, sometimes basic, In its implementation. Bitcoin Unlimited would be implemented via hardfork.
Differences between softfork and hardfork
What is a hardfork? Hardfork is a way to update Bitcoin programs. In it, the new transactions validated by pre-hardfork versions of Bitcoin are considered invalid.Thus, the updating of old software by miners and bitcoin companies becomes mandatory. The advantage of hardforks is that their programs can be more " Clean, "since there is no great concern with transactions made the previous way. Its main disadvantage is the risk there is a split of Bitcoin that creates two currencies.
If two currencies exist, there are two possible paths:
- The two currencies coexist and follow different directions
- One of them being the "winner", making the "losing coin" difficult to survive.
Many experts from the world of Bitcoin think that it does not pay to take this risk.Hardfork is the way that will be followed by Bitcoin Unlimited, if it is the solution adopted by the majority.What is a softfork? Softfork is a form of Bitcoin update that Does not require updating of old software. Therefore, it requires a greater concern to keep new programs of Bitcoin compatible with the previous ones. However, it minimizes the risk of creating parallel currencies. SegWit activation will be done via softfork, should it occur.
What are the possible implications for the currencies I have?
In case the version with SegWit is the winner, it does not change anything with its bitcoins, in addition to normal price fluctuations. If Bitcoin Unlimited wins, there are two possible paths: The first is that there are two currencies: Bitcoin Unlimited and Bitcoin Core.
In this case it is best that each person keep their Bitcoins out of purses, wait for the dust to download and then decide what to do with their coins. If Unlimited is the winning version, there are bags that have said they will ignore it and only support To Bitcoin Core. Also in this case it is best to leave your coins out of stock. Or if there is any sign that Bitcoin Unlimited is the winning solution, take your bitcoins out of stock and wait for the events to unfold. What Bitcoin handbags are thinking of Given the uncertainty, and new alternatives are emerging to solve this impasse, Bitcoin stock exchanges are in a very delicate position to assume some position at the moment. Currently, there are scholarships that say they will only support the version Bitcoin Core and others say they will support both. "We Market Bitcoin await the definitive solution before we manifest," says Rodrigo Batista, CEO of the website. "But we believe SegWit is the best solution," adds Rodrigo.
Future: What to expect from the next chapters?
Miner with AsicBoost Recently it was discovered that the main supporter of Bitcoin Unlimited, the Bitmain company, was using a dubious technique in its mining called AsicBoost. This technique will be impractical if Segwit is implemented. This has raised major questions about the interests behind Bitcoin Unlimited. Bitmain is being accused of barring SegWit simply because it will no longer be able to use AsicBoost. The revelations about the use of AsicBoost have given enough strength to SegWit that looks like it is "winning" the fight today.Newness:
User Activated Softfork (UASF) Running on the outside and in favor of Segwit is a technique of implementing changes to Bitcoin called UASF (User Activated Soft Fork). As it stands now, only miners of the Bitcoin network have the power to approve the SegWit So that it can start to work. With UASF, payment companies, wallets and Bitcoin users can have voice and force the use of SegWit. This is an alternative that is gaining a lot of strength and that we will follow closely. If it is adopted, the beginning of the migration to it begins in August, and would have no impact on its currencies. The fight reached Litecoin Bitcoin is often referred to as "digital gold". The litecoin would be the "digital silver". By having a more agile governance system, litecoin programmers are working to have SegWit before Bitcoin. This is attributed to the recent appreciation of litecoin, which has reached more than 100% in recent weeks. An eventual implementation of SegWit in litecoin Is seen as another pressure for Bitcoin to have the same technology. The Bitcoin Market is the only site that offers the option to trade litecoins in Brazil.