Earlier today, on November 8, the bitcoin price recovered to over $7,400 after dipping briefly below $7,000, as the market continued to show support for the original bitcoin blockchain over SegWit2x.
Decline in Support For SegWit2x
Charlie Lee, the creator of Litecoin and former Coinbase executive, revealed that Nick Szabo, blockchain, bitcoin, and smart contracts pioneer whom the bitcoin community considers as a figure closest to bitcoin creator Satoshi Nakamoto, has publicly expressed his opposition against SegWit2x.
Scaling is a sensitive but important topic to bitcoin developers, community, and the industry. But, the community has been adamant that developments within the bitcoin protocol and other cryptocurrencies should be executed and conducted in a decentralized manner, like any other open-source project.
Over the past few months, the conflict between SegWit2x supporting businesses and the bitcoin community has been portrayed as a battle between small block supporters and the so-called “big blockers,” and that has certainly not been the case. The community has rejected SegWit2x because of various technical reasons, beginning with closed-source development, opaque agreement made between a restricted group of businesses, developers, and miners, and the SegWit2x development team’s refusal to implement strong replay protection.
As such, the demand for SegWit2x and support for the software has declined in the past few weeks, even from the mining community. Bitcoin journalist Kyle Torpey noted that hashrate support for SegWit2x has substantially decreased in the past week as well. More to that, an increasing number of mining pools in the industry have started to terminate their support for SegWit2x.
Evidently, scaling is necessary for bitcoin and there exists no reason as to why bitcoin cannot evolve as both a digital currency and a robust store of value. But, scaling needs to be done in the right way and more importantly, in an open-source, decentralized, and distributed manner.
How Will SegWit2x Affect Bitcoin Price?
Several analysts have stated this week that the surge in the price of bitcoin should be attributed to the allocation of funds from bitcoins to bitcoin, from investors hoping to obtain B2X upon the SegWit2x hard fork. However, it is far fetched to claim that the upward momentum of bitcoin in the past month was triggered by the SegWit2x movement, given that the majority of investors in the market are not technical enough to understand the implications of SegWit2x.
Such claims imply that investors and traders within the bitcoin and cryptocurrency market have underlying knowledge in hard forks and technical developments in regards to bitcoin development, which is not the case. Bitcoin has appealed to the mainstream since early 2016 and billions of dollars worth of funds are likely held by institutional and large-scale retail investors that consider bitcoin as a safe haven asset and a store of value.
Similar to the impact Bitcoin Cash had, the price of bitcoin will likely endure a major correction upon the SegWit2x hard fork. But, it seems unlikely that the price of bitcoin would decrease by more than 10 percent, as the Bitcoin Cash hard fork also had minimal impact on the price of bitcoin.
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Last modified: March 4, 2021 5:01 PM