Often called simply a “digital currency” Bitcoin is best viewed as a protocol, a set of code, that delivers data, in this case Bitcoins, in defined quantities called blocks that are then stored in a sequence called a Blockchain, on a distributed set of global computers.
Bitcoin is decentralized – in that many people help make the network function, and in choosing to run its software, users all agree to abide by the same rules to keep it operational.
It’s these qualities that make the proposed change particularly divisive.
Segregated Witness – Segwit2X
SegWit2X – Hard Fork – creates separate Blockchain – Legacy and 2X
Solution to bandwidth restrictions, hours or days to get blockchain transactions causing massive delays and on costs.
Number of transactions limited to 3 to 5 transactions per second. Credit cards can handle upwards of 16000 transactions a second.
Allowing Blockchain to expand its number of transactions is a good thing.
2017 – 16 million bitcoin have been mined and 21 million Bitcoin is the cap for Legacy Bitcoin
SegWit2X – would take bitcoin cap to 42 million (Potential to grow again to 84 million) – but this will be a completely new Blockchain with zero backwards compatibility
In the blink of an eye, out of thin air we create 17 million new bitcoins which can be grown up to 21 million.
Both drive forward in parallel.
If they both continue, then there is the potential for there to be 42Million bitcoin
However, if one or more of these flavours of Bitcoin fall out of favour, then their value can fall through the floor.
Bitcoin Cash – Hardfork – August 1st 2017 – Seamless no effect on Legacy Bitcoin Blockchain.
Bitcoin Gold – Hardfork – August 1st 2017 – Seamless no effect on Legacy Bitcoin Blockchain.
Legacy Bitcoin – original – March 2009 (theoretically cast in stone)
2X Bitcoin – Hardfork – Delayed December 2017 – Will definitely create a new Blockchain when it happens.
By end of 2017 it had been proposed that we would have 4 flavours of Bitcoin and the 21m cap, the tablet of stone on which the original proposal was made, will be long gone. (The deadline for the split has passed – November 2017)
The underlying cap of 21 million Bitcoins, upon which the whole ethos of Bitcoin was established, will be shattered and Bitcoin will cease to be a true “Peer to Peer” cooperative.
Some users think this is a good idea, others don’t.
But to begin, it’s important to note how this fork differs from others. Coming on the heels of the Bitcoin Cash and Bitcoin Gold forks, Bitcoin users might be accustomed to certain outcomes – ones that might not be guaranteed in the case of Segwit2X.
With Bitcoin Cash and Bitcoin Gold, for example, Bitcoin users could have paid little to no attention and it wouldn’t have impacted their transactions. If you held Bitcoin on certain exchanges (or your own wallet), you received the new cryptocurrency.
This smooth outcome, however, isn’t guaranteed with Segwit2X.
In case there were any remaining doubts, it now seems clear that the SegWit2X hard fork will not happen.
The SegWit2X project, a product of the New York Agreement signed onto by a long list of companies and miners in May, had scheduled a hard fork to double Bitcoin’s block weight limit, November 17th 2017.
Despite the seeming failure of SegWit2X to take off in any way, it should be noted that there is technically no way to declare a fork like SegWit2X officially “dead” or “failed.”
The price of a bitcoin can unpredictably increase or decrease over a short period of time due to its young economy, novel nature, and sometimes illiquid markets.
Consequently, keeping your savings with Bitcoin is not recommended at this point. Bitcoin should be seen like a high risk asset, and you should never store money that you cannot afford to lose with Bitcoin.
Protect yourself at all times, take responsibility for your own financial affairs and never speculate any cash you cannot afford to lose. In 2017 you will need to be a massively sophisticated Bitcoin expert to have any chance of understanding what is going on.