Segwit2x was scheduled to happen on 16th of this month but this is no longer the case. The team behind the hard folk published a post impressing that they will be abandoning their efforts on the some due to lack of community support. Essentially, segwit2x was to become effective following the consensus of at least 95% of the bitcoin community. However, seeing that the due date for the hard fork is drawing nigh and the consensus is not close to being reached, chances of the fork happening have become quite thin. The intent of the fork was to increase the size of each block on the bitcoin blockchain to enable scalability. Notably, segwit2x was preceded by segwit, which was successfully activated sometime in August. While the objective of the segwit2x was to increase the block size further, the conspicuous lack of consensus on this move pointed to the possibility of dividing the bitcoin community. According to Belshe, the Ceo of Bitgo, ‘this was never the goal of segwit2x.
The fees charged on the bitcoin blockchain are continually increasing pointing to the possibility of having to increase the size of the blocks. While that will might not happen through the proposed hard fork, Belshe remains hopeful that when the time comes the community will be willing to concede on the block size increase.
Market reacts to the cancellation
The anticipation that has been building up was reflected in the crypto market following the announcement on the cessation of the hard fork. Notably, the price of bitcoin rose to about $7,900 in a span of just one hour setting a new record high. As of the time of writing this article (Nov, 9), however, the price of bitcoin has dropped to $7,131. FUD is still a major part of the crypto market at this point hence, this decline could be a reflection of the blooming uncertainty on what is to be expected. Nonetheless, the announcement on the cessation of the segwit2x has seen other cryptocurrencies begin to gain momentum. Considering the widespread positive sentiment that was behind segwit2x, many people had moved their investments to bitcoin in the hope of making a handsome rerun following the hard fork. This meant drawing funds from another crypto, which saw their prices drop and stagnate at different prices. With a semblance of calm slowly finding its way back into the market, investors are beginning to spread their investments across different crypto.
There has been infighting in the bitcoin community over the scalability and the capacity of bitcoin and more so on how to revamp these features. On one hand, some members are of the opinion that bitcoin will act as a payment platform for the future allowing for payment of simple commodities such as snacks. It is, however, important to point out that bitcoin capacity as it is too small which makes it unreasonable to make a small transaction using bitcoin. On the other hand, other members of the community envision bitcoin as being a unit of storage similar to gold as discussed in our previous article.
While key players in the bitcoin community remain reluctant to approve the hard fork, most bitcoin users feel that increasing the block size is necessary. The contention does not root from increasing the block size but rather the fact that increasing the block size would alter pertinent features of bitcoin. Additionally, this would place a lot of power in the hands of miners and big companies since the protocol would have been altered at their call.
The hardfork would have resulted in two competing blockchains and the fight for dominance would have been ugly. While this possibility appears to have been averted, volatility is still to be expected as the market continues to find its footing amidst the cancellation of segwit2x.