Bitcoin Hard Fork suspended as currency avoids split

7 years ago - Published in Finance, Fintech Land, Technical Analysis

There will almost certainly be no Bitcoin hard fork next week: the main organizers behind the SegWit2x project have "suspended" their efforts.

Called SegWit2x, the proposed fork would have increased the blocksize of bitcoin to allow quicker and less costly transaction processing. But it failed because of a lack of consensus support across the bitcoin community, including from bitcoin miners and exchanges.

In an email to the SegWit2x mailing list, one of the main organizers behind the project, BitGo CEO Mike Belshe, explained that the proposed hard fork has not been able to gain sufficient consensus to proceed:

"Although we strongly believe in the need for a larger blocksize, there is something we believe is even more important: keeping the community together. Unfortunately, it is clear that we have not built sufficient consensus for a clean blocksize upgrade at this time."

SegWit2x is an agreement among high-profile figures in the bitcoin world aimed at upgrading the bitcoin network’s capacity. It received significant support when it was announced in May but many bitcoin developers had withdrawn support for the upgrade over the last few months, analysts said.

The software upgrade would have attempted to address the bitcoin network’s limitations in processing millions of daily transactions. The network has not kept pace with growth and is unable to process transactions fast enough.

However, the hard fork part of the New York Agreement was always controversial for a number of reasons . As a result, a growing number of signatories dropped out of the agreement over the past weeks and months, while developers , user communities , public polls , future markets and more all indicated limited support for the effort. And as the hard fork date drew closer, it become increasingly clear that SegWit2x would in fact spawn a new currency rather than constitute an upgrade of the Bitcoin protocol.

Initial reports noted that the price of bitcoin rose following the announcement thanks to claims that it brought stability to the market. But others who were holding bitcoin in hopes of obtaining an additional cryptocurrency post-fork in the form of “Bitcoin 2x” weren’t nearly as pleased.

“Our goal has always been a smooth upgrade for bitcoin,” BitGo’s Belshe said in his email. “Although we strongly believe in the need for a larger blocksize, there is something we believe is even more important: keeping the community together.”

Charlie Lee, creator of the Litecoin crypto-currency and a leading industry expert, said in a post on Twitter the bitcoin community may need to implement Segwit2x in the future anyway, but it should be done when there is consensus.