Bitcoin Wars – Real Bitcoin please stand up?
The Bitcoin wars have been raging for a couple of years, the design that led Bitcoin’s success – its decentralized design is threatening to lead in to a Bitcoin civil war. Because Bitcoin is decentralized – any changes or improvements to the network must be agreed upon and consensus must be reached between all the users, miners, developers and companies (exchanges, wallets etc) of Bitcoin. This war of coins started with the discussion around the best way to scale Bitcoin to process more transaction per block.
As Bitcoin grows, more transactions are added to the network – however there is a limit in the number of transactions that can be added to a block due to its size. Miners will prioritize transactions with higher fees as that makes them more money and as a result, users will offer more and more fees to get their transactions confirmed faster. This is the reason why Bitcoin fees have been gradually increasing over time – the network limitation. The Bitcoin community knew that something must be done to solve this problem, but they could not agree on the correct solution.
Team A – These guys believed the best way to scale Bitcoin and solve the increasing fees problem is to increase the block size – makes sense as this is what Bitcoin has done over the years. The block size has been increased gradually, it is now at 1MB. The people that support this scaling solution are mainly the miners – Jihan Wu (Bitmain), Roger Ver and crew. Bitcoin.com website is owned by Roger Ver a supporter of bigger blocks.
Team B – Thes guys believe the best was to scale Bitcoin is by using Seregated Witness (Segwit) and lightning network. The main supporters of this approach is the Bitcoin Core developers – these guys own the website: Bitcoin.org and as far as they are concerned – they are behind the real Bitcoin. The main reason why they oppose bigger blocks is because of the added complication and barrier to mining it will create to smaller individual miners. This will lead to centralized mining.
In order to reach a consensus, both teams had agreed that a chain split would not be good for Bitcoin. They agreed on a compromise where Segwit would be implemented, then two months later Segwit2X would be implemented. This agreement is the infamous NYA. Without getting in to the politics too much, what we know is before Segwit was implemented – Jihan Wu and crew decided to fork Bitcoin anyway to produce Bitcoin Cash which made the NYA void and hence after Segwit – the Bitcoin community rejected Segwit2X. The Bitcoin wars continued as the scheduled date for Segwit2X upgrade approached. It seemed that the chain would split again as there was no consensus and agreement on Segwit2X.
As the day grew closer – The 2X team suddenly issued a statement that they would cancel Segwit2X upgrade because of a lack of consensus, now Bitcoin Core supporters believe this was their intention all along when they forked Bitcoin Cash. We don’t know what they are thinking or what their intentions were – what we do know is that suddenly after the announcement on November 9th 2017 – Bitcoin Cash price increased from around $600 to a high of over $2400 on 12 November.
The injection of cash in to Bitcoin Cash is was led by Korean Exchange giant Bithumb with up to 40% of the trading volume and second Bitfinex with close to 20%. Bithumb alone was trading Billions in Korean Won. One can make up their own mind on how Bitcoin Cash managed to rise 150% in one day, but it cannot be sustainable. Late on November the 12th saw the Bithumb volumes reducing and the pump slowing down – Bitcoin on the other hand picked up from $5500 per coin to $6200 after Bitcoin Cash calmed down.
What is the real Bitcoin? What do you think, post a comment below:
Which coin will survive?