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Relief and Disbelief – Bitcoin Reacts to Sudden ‘2x’ Suspension

Relief and Disbelief - Bitcoin Reacts to Sudden '2x' Suspension

Relief and Disbelief – Bitcoin Reacts to Sudden '2x' Suspension

The tweets came fast and furious, almost quicker than the articulation.

After months of anger and debate, a group of businesses and mining firms that use bitcoin’s software to provide services suddenly shuttered an attempt at changing its rules. Scheduled to be introduced in mid-November, the Segwit2x software had emerged as a controversial bogeyman, a cloud of uncertainty over bitcoin’s future, that quickly gave way.

Among those who had for months spoken out against the proposal, and what they perceived as a broken understanding of how protocol development should proceed, euphoria was evident.

"Segwit2x hardfork has been called off! Common sense prevails," exclaimed litecoin creator Charlie Lee. “Put a fork in it, it’s done,” tweeted author Andreas Antonopoulos.

Developer Akin Fernandez, one of a legion of bloggers who have stood staunchly against the proposal, tweeted succinctly:

“Bitcoin wins.”

Indeed, the strongest voices in the initial reaction were those who had joined a long-simmering protest movement called "NO2X," which accumulated the support of dozens of companies and users, who displayed their opposition by adding a prefix to their social media names.

The social media behavior, launched in the wake of Segwit2x’s announcement in May, did much to highlight the differing perspectives of the proposal.

An open-source software that requires a diversity of stakeholders to agree to its rules to operate – bitcoin’s major companies, developers and mining pools have each taken a different view of development and how decisions about updates should be made.

Forged in an invite-only meeting, criticisms of Segwit2x came largely from developers, many of whom didn’t necessarily object to the idea larger blocks were needed, but a culture that had sprung up around startups that largely lacked a frame of reference for how network changes had been made, or even the various ways in which changes could be made.

As such, the news could be read as a culmination of a debate that began in 2015, when former bitcoin maintainer Gavin Andresen sought to galvanize interest in a block size change. Since then, several attempts have been made to tweak this aspect of the software.

However, despite its stakeholder support, Segwit2x now joins bitcoin classic, bitcoin unlimited and bitcoin-xt as proposed softwares to fail to gain adoption based on the idea.
 

Unexpected relief

That said, even many of Segwit2x's advocates were relieved the agreement was suspended.

"I am glad it is over," said Guy Corem, a former miner who signed the original Segwit2x agreement in May. "It was the right call."
 

Others hinted at the hostility their public support had brought, and the tactics used by supporters of the "NO2X" segment. Members of the group were often criticized for disparaging remarks and attacks made against Segwit2x supporters.

"I guess I can now pay more attention to more fruitful technical pursuits than following the news and fighting trolls online," said Segwit2x developer Jean-Pierre Rupp.

The acrimonious debate has been almost non-stop on social media channels such as Reddit and Twitter, at the peak leading to alleged death threats.

Due in part to this environment, there was a sense the Segwit2x proposal was not as welcomed by the community as participants had originally expected.

"We're relieved. The goal of the NYA was to bring the community together and keep the majority of the users on the same chain for at least a little while longer," Peter Smith, CEO of cryptocurrency software provider Blockchain, wrote in a blog post.

Others argued much the same – that a hard fork to increase the block size makes sense, but only if the agreement achieves support from all corners of the ecosystem.

"We are big fans of increasing the block size, as our customer really get impacted by the fees, but we want to see it done in a responsible way that brings the entire community together, and takes into account more voices," said Coins.ph founder and CEO Ron Hose.
 

New solutions

Still, there's a strong sense that bitcoin still needs to scale, somehow, in the future, as it seeks to accommodate new users.

“We'll either bring bigger blocks to people [with bitcoin], or we'll bring the people to bigger blocks [on bitcoin cash],” developer Peter Rizun told CoinDesk.

Perhaps unsurprisingly, the news that a block size increase would not be pursued was highly praised by supporters of the Lightning Network, a proposed off-chain microtransaction network that seeks to move bitcoin transactions off the blockchain itself.

"Now that 2x is officially donezo, excited to get back to work building long term solutions like Lightning!" Lightning CEO Elizabeth Stark tweeted.

However, while the news today could position Lightning as a likely solution, the big advances that appear needed to get the network off the ground are now likely to come under scrutiny.

On display at Scaling Bitcoin, a two-day technical conference at Stanford University this weekend, were the challenges yet to be solved with the technology. This includes ensuring privacy in transactions and better understanding the economics of their interactions.

As noted by Hebrew University's Aviv Zohar, presenting new work on the subject, larger blocks may ultimately be needed to optimize the network.

In this way, speculation is already building that Lightning will not be enough, or that it will take too long to take off. As such, some think that businesses will embrace alternative protocols such as bitcoin cash, an alternative bitcoin with a larger block size, or litecoin, founded in 2012 as a vehicle for faster merchant payments.

"We may start seeing more and more businesses move to bitcoin cash for on-chain transactions, due to the high cost of transacting on bitcoin, which is what Segwi2x was attempting to solve," Civic CEO and co-founder Vinny Lingham told CoinDesk.

Jake Smith, Bitcoin.com’s business developer and a long-time supporter of on-chain scaling, said he sold his bitcoin immediately after the news hit. His comments, while brief, showcase how supporters drawn to bitcoin’s possibilities as a peer-to-peer cash have been put off by the news.

"Bitcoin just signed it’s own death warrant, as far as I’m concerned," Smith added.

Likewise, OpenBazaar lead developer Chris Pacia, whose company moved to distance itself from the proposal last week, said more companies would likely turn to other options.

"[Segwit2x] didn't really make sense after the bitcoin cash fork,” he said.
 

Not the last

But while there is temporary relief, there is also new thinking about bitcoin's future.

The key thing that sets bitcoin apart, to many, is that it's a decentralized, digital way to move value that no one entity controls. And to some, Segwit2x’s failure simply showcase’s the strength of the technology in defending against influences that could undermine this.

Bitcoin developer Bashco pointed to the long line of attempts to increase the block size or undermine developers via such proposals, implying there will be others down the line.

"They will lick their wounds and regroup," the developer told CoinDesk.

This view speaks to the idea Segwit2x was best considered as an attempted "takeover" of bitcoin, in that developers behind it wanted to rewrite the cryptocurrency's rules without getting full agreement from the community.

A controversial move was also the decision by Segwit2x developers to remove code that constituted what has been described as “replay protection,” meaning the fork could have been executed in such a way that user funds could have been at risk if two chains emerged.

Still, some used the news to call for changes to the culture and community, especially those that keep in mind how governments or authorities could use similar methods to corrupt or harm the protocol in the years to come.

"We must continue with the research into forks and chain splits and building tools and defenses because it will almost certainly be tried again," Bitcoin Core contributor Eric Lombrozo told CoinDesk.

Bitcoin developer Matt Corallo, who had publicly feuded with high-profile members of the Segwit2x group, voiced a similar opinion that sought to appeal to unity.

"Let's take Segwit2x's failure as a learning experience – bitcoin's community is strong, and needs to broadly support any changes to bitcoin's consensus rules," he tweeted.

Others were more grandiose, hinting at the expansive narrative that has seemed to shroud what some outside the industry may see as a benign numerical change.

Pseudonymous bitcoin blogger WhalePanda tweeted:

"We won this battle … but they will keep coming to destroy bitcoin. We will not forget.”

 

Authors: Pete Rizzo & Alyssa Hertig Nov 8, 2017 at 23:05 UTC

 

Posted by David Ogden Entrepreneur
David Ogden Cryptocurrency Entrepreneur

Alan Zibluk Markethive Founding Member

First Cash, Now Gold? Another Bitcoin Hard Fork Is on the Way

first cash now gold

First Cash, Now Gold? Another Bitcoin Hard Fork Is on the Way

Bitcoin, bitcoin cash, bitcoin gold?

There could be as many as four cryptocurrencies bearing the bitcoin name if a small group of miners and developers carry out a planned fork of the blockchain this month.

Styled as a rebellion of sorts, bitcoin gold aims to follow a similar launch plan as bitcoin cash – the blockchain that split from bitcoin this summer by way of a "hard fork." The idea of the project is to release an improved protocol, one that will challenge bitcoin cash in particular, and details are now starting to come come into focus.

Led by Jack Liao, CEO of Hong Kong mining firm LightningASIC, bitcoin gold is slated to launch on October 25, with its cryptocurrency being opened to exchanges on November 1.

Still, while whispers of the event are just beginning to spread, the importance of the project appears up for debate. Given that bitcoin cash produced an ultimately smaller bitcoin network, not to mention a cryptocurrency that's worth about 12 percent as much as bitcoin at press time, most seem to view the plan as another distraction in an already divided community.

For one, bitcoin gold looks like it could be even smaller that bitcoin cash, at least in that not as many miners seem to support it.

In remarks, BTC.Top founder Jiang Zhuoer and ViaBTC CEO Haipo Yang – two early champions of bitcoin cash – went so far as to downplay bitcoin gold as insignificant.
 

'Decentralized again'

But while those in the know might be skeptical of bitcoin gold, it does have a goal that many in the community may find attractive: creating a truly decentralized bitcoin.

Most notably, the developers behind the network hope to open up mining to more participants by replacing bitcoin's mining algorithm with one that will enable it to be mined with graphics cards. The idea is to make big miners – sometimes controversial figures on the network – less relevant.

"Bitcoin gold will implement a proof-of-work change from bitcoin's SHA256 to Equihash, a memory-hard algorithm that is ASIC-resistant and optimized for GPU mining," explained pseudonymous bitcoin gold developer "The Sorrow."

That the plan is being hatched in China, long the hotbed of bitcoin mining, only adds another layer to the story. Liao, whose mining hardware largely focuses on the litecoin network, is seen as one of the few voices domestically that can challenge the established order.

Yet, Liao was quick to name one mining firm in particular, Bitmain, as the reason that more bitcoin users should support the idea. A mining company that has been at the center of bitcoin drama over the last year, critics have long argued that the firm has too much of an influence over the network.

Still, creating a network that grows so popular as to remove miners is easier said than done, and some are skeptical that this would lead to the end goal that bitcoin gold advocates desire.

"GPU mining can't prevent centralization. GPU [markets] are controlled by Nvidia and AMD," Zhao Dong, a cryptocurrency trader and investor, argued in response to the plan.

Liao, however, argued the accessibility of the companies' products means the distribution of hashing power might evolve differently.

 

Bitcoin gold's unknowns

Again, though, even project leaders admit many of the details around the hard fork are fuzzy.

Bitcoin gold's pseudonymous lead developer "h4x" said that the project is "still evolving" and details such as exact block height of the hard fork are still up for discussion.

According to the original website text, bitcoin gold was even planning an initial coin offering (ICO) by which 1 percent of the bitcoin gold coins would go to the developer team, but these details have since been removed.

One thing is clear though about the funding: because of the nature of the split, every bitcoin user at the time will have an equal amount of bitcoin gold associated with their private key.

"It is a minimalist fork of the Bitcoin Core codebase in the spirit of litecoin – only a few conservative modifications," said h4x.

H4x went on to describe bitcoin gold in more abstract biological terms, arguing that it tests how well hard forks work and if they benefit the ecosystem.

He said:

"Organisms derive benefits from creating offspring. With bitcoin gold we are conducting an experiment to see if that principle holds true in the world of blockchains."

And this sentiment is largely in line with developers who have predicted that more bitcoin forks similar to bitcoin cash will come forth in the future.

After bitcoin cash forked earlier this summer, for example, Lightning Network developer Tadge Dryja argued that more forks would spring up, but for another reason: money.

With bitcoin gold in the works and another hard fork slated for November, it seems that prediction is slowly becoming reality.

 

Sep 27, 2017 at 08:00 UTC by Alyssa Hertig

 

Posted by David Ogden Entrepreneur
David Ogden Cryptocurrency entrepreneur

Alan Zibluk Markethive Founding Member

Will The Bitcoin System Change Drastically in 2017

Will The Bitcoin System Change Drastically in 2017

Bitcoin continues to be as popular as it is volatile. Prices have been fluctuating since the beginning of the year, hitting an all-time high at more than $1,300 per unit a couple of weeks ago. Nevertheless, value has yet to stabilize for a number of factors.

The cryptocurrency market has more competitors entering the game every day, with alternatives like Ethereum and Litecoin gaining more ground in the digital world. Still, they all suffer similar setbacks when it comes to prices.

Below, we take a look at the seemingly unusual phenomenon that has been affecting Bitcoin value over the last couple of months. Cryptocurrency still has to pass some big hurdles if it ever wants to stabilize as a trustworthy option to gold and bonds.

The market is small and it moves fast

When compared to precious metal markets like gold and silver, the market size of Bitcoin is so small that it makes it too easy for someone to come one day and make a major investment that would significantly impact currency movements.

Forbes estimates that with just a $50 million buyout of Bitcoin in one day, the market would flip causing volatile price hikes and plunges across the world.

Doing this, of course, is not as easy as it sounds, but it remains a possibility that fuels distrust among traditional investors in safer value-preservation assets.

Is Bitcoin as good as Gold or bonds?

While Bitcoin has been gaining many supporters and endorsements that legitimize it as a real-world currency, it still doesn’t have as much credibility as more traditional methods such as stock shares and precious metals.

The inherent issues of Bitcoin trading make it a hard sell to most people not well-versed in next-generation finances and transactions, and particularly cryptocurrency.

Moreover, there is no regulatory body creates rules for the Bitcoin market which is why is so appealing to certain groups on the Internet. However, economists have been increasingly talking about digital money could end up in its adoption and regulation.

There is a hard fork in the Bitcoin horizon

There is an unresolved paradigm that deals with how the Bitcoin transaction system works at its core, but that issue is coming to an end in what many predict will split the virtual currency in two.

Essentially, the Bitcoin transaction process deals with exchanges through a network that can no longer support the high-demand of users, miners, developers, and others that use it every day, thus slowing and halting its growth both in price and adoption.

Two potential solutions have come up, but only one of them will be implemented by developers of the Bitcoin network once community consensus reaches 95% for either option.

The first, Bitcoin Unlimited, would grant greater power over the network to miners, who would decide to “increase” its capacity if and when needed. This option has faced some technical difficulties in the past during its development phase.

Segregated Witness, on the other hand, would “double” the capacity of the network and allow a greater influx of transactions while also retaining decentralized control over it. This, however, is not the greatest long-term solution since it is still limited.

Pressure from third parties to implement such a framework that would enhance transaction volumes in the Bitcoin network. The impending possibility of change has the market on its toes which also explains the radical price changes.

Either choice will have a permanent impact in Bitcoin as we know it, effectively splitting the cryptocurrency into two parallel systems that will compete and affect each other’s price with a high projected correlation.

 

David Ogden
Entrepreneur

Source: Coinbase

 

Alan Zibluk Markethive Founding Member