How SegWit2x was planned at the New York Agreement and what are the risks you’re exposing your investment to if this Bitcoin hard fork happens
Bitcoin didn’t even show all his SegWit benefits (internal) and it already has upcoming news. Due to the New York Agreement (NYA) miners are already announcing their support for the SegWit2x upgrade scheduled for November. But this change won’t go as smooth as the SegWit one. It will force Bitcoin to fork. And, exactly, we’ll have a new (third) Bitcoin!
What is the New York Agreement?
The New York Agreement is an agreement made by a group of international Bitcoin companies before the Consensus conference from New York in May 2017 (here comes the name.) They reached the conclusion that Bitcoin’s scaling issues can be solved by a fork on Bitcoin.
What is SegWit2x?
The NYA is meant to happen in two steps:
- The SegWit protocol upgrade on August 1st (that we’ve seen it successfully happen as a soft fork)
- The SegWit2x, an increase of Bitcoin’s block size limit to 2MB (that isn’t backward compatible and can only be applied as a hard fork)
We can consider that SegWit already doubled the number of transactions that can be included in one block by stripping them down to half their initial size. Now, doubling the size limit with SegWit2x will lead to a 4x increase. This upgrade is necessary for Bitcoin’s future developments.
1/ "[SegWit] is not related to the Segwit2x hard fork"
Actually: SegWit is 1/2 of SegWit2x. SegWit would not be active without SegWit2x.
— Jeff Garzik (@jgarzik) August 30, 2017
What are the risks?
Once the first phase, SegWit have been a soft fork upgrading the Bitcoin software without affecting any of the previous transactions or the current way of handling its use, SegWit2x can deploy only through the activation of a hard fork.
This means, that after this upgrade we’ll have one more Bitcoin. And we have an example too. Bitcoin just hard forked earlier this month creating Bitcoin Cash as a completely new standalone coin. Similarly, SegWit2x will create another Bitcoin (the third one if we count Bitcoin Cash too.)
Will Bitcoin maintain its price causing the SegWit2x Bitcoin to act as a nice airdrop bonus? Will the price split between both of them? Or maybe the price will drop because of FUD (fear, uncertainty, and doubt)?
We don’t know. And we can’t predict either.
But what we know is that the SegWit2x chain may not include replay protection. Even if it’s an open issue, with implementations proposed, there is a chance that it won’t be included in the final update. So, when the chains will split, you are at risk of losing your coins on one chain on making transaction at the other.
Here’s a short animation from World Crypto Network explaining why this can happen:
So, now you know why the community has split claiming that we don’t really need SegWit2x, SegWit’s first phase was enough to solve the current problems, advising the companies and the miners behind them to break the initial agreement and give up on the upgrade.
Who is right?
These are the straight up facts we know for now. At this time, we don’t really know if SegWit2x will even happen. We can only see the opposing opinions thrown from one side to another. You may already have taken a side too. There’s nothing to do right now, only to stay informed and gather the facts from BOTH sides.
Disclaimer: the author does not promote any of the coins mentioned in the article as better than others. Do your own research and pick wisely!