SegWit2X: The upcoming hard-fork and what to expect
The cryptosphere can sometimes seem like a daunting and overly technical space for the average person. Especially when it comes to forks and the infamous SegWit. Before looking into what to expect from the upcoming fork, let’s first look at what a fork really means and what is SegWit.
Put simply, a fork is a change in the rules and code of the network. If the changes of the network protocol are backward compatible, meaning that old nodes will recognize the new blocks as valid, there will be no blockchain split and the fork is called a “soft” fork. In a “hard” fork, however, the changes are not backward compatible and require a new diverging blockchain to be created.
Fork changes can range from adding new features, such as enabling multi-sig, to changing the core structure of the protocol, such as increasing the maximum block size. SegWit, short for Segregated Witness, is a soft fork that enables to work around the 1Mb limit block size restriction in the bitcoin protocol without having to split the blockchain.
Presented by Bitcoin Core, the reference client of bitcoin, SegWit scaling solution increases the volume of transactions that fit into blocks without raising the block size parameter. SegWit2x, on the other hand, is a proposal that supports the SegWit code upgrade and also an increase of the block size limit to 2MB through a hardfork.
Bitcoin Core does not support the activation of SegWit2x (S2X) and has released a recent statement warning Bitcoin might go through “possible incompatibility with some major services”. The proposal is indeed controversial, seeing as it is not supported by the majority of the Bitcoin users and developers. However, the proposal is endorsed by some developers, most of the larger Bitcoin mining pools and prominent business like Coinbase, BitPay, Xapo and Blockchain.
What to expect?
It is hard to say what will happen. Even the date is not certain, with rough estimates expecting it to occur on the 17th of November. If SegWit2x moves forward, allowing miners to mine blocks bigger than 1MB, it will break Bitcoin’s current consensus rules resulting in a hardfork. Bitcoin holders will receive both original Bitcoin (BTC) and the new SegWit2x coin (B2X) after the fork.
However, some people in the bitcoin community say that SegWit2x is a hostile takeover attempt on the bitcoin network. Unlike the Bitcoin Cash fork, which intended to become a separate chain from Bitcoin, SegWit2x is an attempt to supplant the original Bitcoin. The development team behind the fork, led by Bloq CEO Jeff Garzik, has refused to include a strong replay transaction protection, a factor can lead to the network being vulnerable to attacks and scams, compromising its safety and reputation.
Without replay protection, new transactions will be equally valid on both chains. This means that every time you make a transaction it could be copied or “replayed” on the other chain. To avoid this type of relay attacks or other scams, it is recommended to split both coins into two different wallets of their respective chains. A full guide on the subject can be found here.