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Note: This is a two-part series of articles based on a conference call from October 26, 2017 featuring Chaincode Labs co-founder and Bitcoin Core contibutor Alex Morcos and BitGo CEO and co-founder Mike Belshe regarding the upcoming SegWit2x Bitcoin hard fork attempt. This second part focuses on Bitcoin businesses attempt to change the protocol rules without clear consensus. Part one, which can be read here, focuses on whether or not SegWit2x could be viewed as a corporate takeover of Bitcoin and should be read first.
While some major businesses would like to see further capacity increases to the Bitcoin network in order to provide lower fees and more reliable transactions to their users, such a change does not yet have the full support of the greater Bitcoin ecosystem.
The hard-forking increase to capacity associated with SegWit2x is expected to activate in a couple of weeks, and the vast majority of the major proponents of the change have shown no signs of backing down — even in the face of loud opposition from many Bitcoin users in various ways.
So why are SegWit2x proponents still backing this contentious hard fork that could potentially split Bitcoin into two separate cryptocurrency networks?
Morcos Points Out the Lack of Support for the 2x Hard Fork
In his opening remarks on the 2x hard fork, Morcos noted that the push back on this proposal from the community is “not really relevant anymore because I think the 2x plan has already failed.”
Morcos went on to share a few different data points that indicate a lack of support, not to mention consensus, for the 2x hard fork. According to Morcos, Twitter polls, statements from local meetups, recent software choices made by those who operate full nodes, and futures markets have all indicated a lack of support for the change.
In terms of local meetups, statements have been issued by Bitcoin communities in Seoul, Munich, Brazil and Argentina, Italy, and Hong Kong in opposition of the 2x hard fork. No local Bitcoin meetups have come out in support of the hard fork.
“I just don’t think there’s any way you can claim there’s consensus or overwhelming support for a proposal when you have these big, in-person meetups of people that really care about Bitcoin coming out in opposition to it,” said Morcos.
In terms of the futures markets, Morcos pointed out that the trading at three different exchanges indicate a split of 85% of the value remaining on the current version of Bitcoin and 15% of speculators moving to the new, 2x chain — albeit on very low volume.
“I don’t think you could argue that you had overwhelming support from the community or consensus of the ecosystem or whatever you need in order to change the rules of everybody’s money and have all four of these indicators pointing firmly in the opposite direction,” said Morcos. “If anything, this is showing very strong support against the fork, but we don’t need to demonstrate strong support against the fork. What we need to demonstrate is that the fork doesn’t have overwhelming support. It does not have the consent of the community to change the rules of their money.”
Belshe: If Not 2x, Then What?
When making the case in support of the 2x hard fork, Belshe discussed how long Bitcoin’s scaling debate has been going on and the need to seize this opportunity of increasing capacity beyond what is provided by Segregated Witness (SegWit).
“This story has its genesis about three years old now, and a lot of us have been hoping this would resolve faster,” said Belshe. “I’ve been at meetups and conferences over the past couple of years where we thought this would go faster, but it is what it is.”
Belshe claimed that many people have asked him to call off his support of the 2x hard fork, to which he has responded, “If not this, then what?”
In Belshe’s view, the past few years have shown that it is extremely difficult to get capacity increases implemented into the Bitcoin protocol, and the upcoming 2x fork is an attempt to do that rather quickly.
While SegWit also comes with it’s own effective doubling of capacity, it also requires wallets to upgrade their software. This means the full effects of SegWit’s capacity increase will not be available until more wallets upgrade or more users move to SegWit-supporting wallets. This issue of having individual wallets complete more complicated upgrades to increase capacity does not exist with the 2x hard fork.
“If we don’t do this [2x hard fork], we won’t see another capacity increase for at least a year, probably two years,” said Belshe.
Having said that, Belshe echoed Morcos’s statements regarding the need for consensus when attempting a hard fork like this one.
“A big part of upgrading the capacity of the network in any fashion is getting agreements, consensus from everyone,” said Belshe. “I think that’s why we’re having this debate today. That includes everyone in the ecosystem. The miners are a role, the end users are a role, [and] the businesses that are trying to make the community stronger are a role, so we’re all part of that.”
Belshe went on to note that he is concerned about whether or not the 2x hard fork has enough consensus. Having said that, he also pointed out that it’s difficult to tell if a proposal has consensus in Bitcoin.
“We do need to get consensus,” said Belshe. “I think we will find out, certainly when the market votes for sure.”
While the currently-available futures markets related to the 2x hard fork provide some data, it’s likely that trading will become much more active once the network split takes place.
Belshe also pointed out that SegWit itself did not, in his view, have consensus before the New York Agreement.
“You could say, ‘Oh, that’s just those pesky miners that were holding it up, and we had complete consensus from everyone else,’” added Belshe. “Maybe. This is this problem of like it’s very difficult to measure — in a trustworthy way — who’s in favor and who’s not in favor.”
Some factions of the Bitcoin community that opposed the 2x hard fork have said they might be fine with the increase to capacity if more time was taken to gather consensus.
“There’s a current set of code, which has been locked-in, which had a three-month timeframe on it,” said Belshe in regard to a possible delay of the hard fork. “Personally, I’m not opposed to taking another three months or six months to do it. If this doesn’t go through properly and in another three or six months everybody has enough time to get on board and then we’d want to do it, that’d be great.”
Having said that, Belshe also stated his belief that the opportunity to initiate the hard fork right now must be seized.
Belshe also pointed to the early history of the internet where routing protocols faced similar debates on the tradeoffs between capacity and decentralization. According to Belshe, a capacity increase was eventually deployed, and although there was outrage at first, everyone who believed in the promise of the Internet eventually came back together to achieve their common goal.
“I believe that will happen now [with Bitcoin],” Belshe added. “We have a healthy, vibrant community with Bitcoin. We have a fantastic product that offers the best type of money the world has ever seen. In spite of the arguments you read on Twitter and Reddit, we actually all want the same thing. We want Bitcoin to be great, we want it to be decentralized, we want it to be more decentralized, we want to work on it together, we want the miners to be successful, we want the businesses to be successful, [and] we want the end users to have sovereignty. We want these things. That’s what makes Bitcoin great. We will get past this once we’re over the fork.”
