Although there has been some criticisms toward the Bitcoin Scaling Agreement presented by Digital Currency Group and 56 other companies that represent approximately 83.3 percent of the network’s hashing power as reported by CCN.com, the industry has learned two important takeaways from the aftermath of the agreement: majority support for Segregated Witness (Segwit) and the necessity of consulting the Bitcoin Core development team for accurate projections and plans.
One major criticism toward the Bitcoin Scaling Agreement was the unrealistic deadline proposed by the 57 companies and miners. According to Bitcoin Core developer Greg Maxwell, Segwit as proposed on the Bitcoin Scaling Agreement can’t be activated by September with a changed activation threshold.
On December 21, 2015, Bitcoin Core developers Pieter Wuille and Eric Lombrozo, along with Johnson Lau authored Bitcoin Improvement Proposal (BIP) 141, introducing Segwit as a soft fork. Segwit’s initial activation threshold was set at 95 percent and designed to timeout or expire at midnight of November 15, 2017.
In a statement, Maxwell explained that in order for Segwit with an 80 percent activation threshold to be activated, the current proposal of Segwit has to timeout or expire, meaning that the industry and mining community would have to wait until November 15 to newly execute Segwit with a different activation threshold.
“Redeployment of segwit basically can’t happen until the old deployment expires. The reason for this is because for simplicity and safety reasons all segwit supporting versions of Bitcoin only have segwit code paths for the most part… e.g. there isn’t separate handling for segwit and non-segwit txn. Segwit’s current non-activation is achieved by a very minimal set of tweaks on top of that.”
More importantly, Maxwell noted that the initiators of the Bitcoin Scaling Agreement should have consulted the Bitcoin Core development team to ensure that there exists no technical roadblocks that could further delay the activation of both the current and newly introduced Segwit proposals.
Despite the conflict between the Bitcoin Core development team and the corporations behind the Bitcoin Scaling Agreement, the community has discovered that at least 83.3 percent of the miners, including Bitmain, which was one of the few miners that was wholly against the plan of activating Segwit, are in fact in support of Segwit.
Furthermore, Bitcoin Core developer Eric Lombrozo met with Digital Currency Group and its founder Barry Silbert to discuss Segwit and make significant progress in bitcoin scaling.
Such enthusiasm and optimism toward Segwit led experts including former BTCC executive and current Blockstream chief strategy officer Samson Mow to advocate for a user-activated soft fork (UASF) and some others to express their support toward the original BIP 141.
“So it’s clear that all anti SegWit propaganda was purely FUD & politics. This makes the case for UASF stronger than ever,” said Mow.
Trace Mayer, prominent bitcoin investor who has funded bitcoin startups including Armory, Bitpay & Kraken, emphasized the importance of activating Segwit by demonstrating the rapidly rising fee market within Bitcoin. According to Mayer, the average transaction fee per bitcoin transaction is over $3 and based on data provided by Blockchain, transaction fees have increased by around 5 times over the past few months.
Evidently, the Bitcoin network needs to scale quickly in order to address the rapidly rising daily transaction volume and number of users. However, the industry has seen more progress with scaling in the past few weeks than it did over the past five months.
Mayer noted in his statement that Bitmain has been responsible for delaying the activation of Segwit. However, the Bitcoin Scaling Agreement revealed that Bitmain is in support of activating Segwit if the 2MB hard fork execution plan is guaranteed. With a compromise like a 2MB hard fork, Bitcoin will most likely be able to scale appropriately soon.
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Last modified: July 2, 2020 8:19 PM UTC