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F2Pool Starts Signaling for Segwit in Bitcoin

Last Updated March 4, 2021 4:55 PM
Andrew Quentson
Last Updated March 4, 2021 4:55 PM

In a surprising move, F2Pool, which has around 9% network hardware share, began signaling for segregated witnesses (segwit), a controversial proposal that aims to increase capacity while facilitating layer two protocols such as the Lightning Network and sidechains.

Unlike in litecoin, where the market rallied after F2Pool began signaling segwit, there was no price reaction in bitcoin, which may indicate the market doesn’t think there has been any change as segwit still requires another 65% of miners.

Moreover, the signaling began after a somewhat peculiar series of events. Firstly, F2Pool started signaling segwit in litecoin, then surprisingly said he was re-considering, then Charlie Lee said F2pool will keep signaling, Wang Chun, F2Pool’s co-founder, confirmed, but further suggested  he will keep signaling because “I scare DDoS too much.”

That’s just the starters – or just the warm up if you’re into exercising. Wang Chun then went on to say in a statement  that could not possibly make his views any more clear:

“Segwit will be a disaster. I am not going to support it on BTC because I am a bitcoin HODLER. Meanwhile, I do not have a single litecoin.”

You’d rationally conclude that’s that then, but it seems Wang Chun was still hungry and wanted some dessert which took the form of asking his followers a fairly peculiar question: “Should miners stop signaling segwit by the end of current activation period and switch to UASF?”

Miners can’t quite signal for a UASF, otherwise known as a flag-day soft-fork. That is, after block X segwit is activated. In such scenario, miners either upgrade or don’t upgrade. Plus, there is no difference between the two as far as miners are concerned because for miners all forks are hardforks.

Here comes the twist : “As 56% from the poll in favor of segwit & agreed UASF is bad. We’ll respect ur opinion and implement segwit on both BTC & LTC soon. Thanks.”

The poll didn’t ask whether his followers are in favor of segwit or otherwise, but gave a choice between segwit or UASF which also implements segwit. So, between segwit or segwit, with the only real question asked being whether segwit should be activated at a threshold of 95% of miners or whether it should just be activated regardless of how many miners support it.

The Art of Surprise

This, of course, just two days after he said “segwit will be a disaster.” Now, to make some rational sense of this isn’t easy, but some suspect F2Pool isn’t really neutral. They implemented full-rbf, for example, at the advice of Peter Todd, then backtracked after a huge backlash by users.

They’ve never really mined on any other client, but Bitcoin Core, except for that one time when they pretended to give their users a choice by making mining with Bitcoin Classic as difficult as possible which led to just one block in a week or so despite the pool at the time having some 25% network share.

On the other hand, it may well be the case that the decision is actually purely made to avoid any DDoS as Wang Chun says or implies. F2Pool is a classic pool, running no hash of its own, and is a fairly small operation, therefore may not have the resources other pools do.

In that case, it doesn’t seem like a smart move to reveal DDoS-ing has so much effect on his pool. Nor does it sound like a good idea for miners to keep using F2Pool when their profits can so easily be affected by a DDoS either from competitors or segwit supporters.

Their hash has fallen to around 9% in the past four days, with segwit and Bitcoin Unlimited now very much neck and neck, both having around 36% network share. That suggests bitcoin is fully split.

As such, after two years, there is still no resolution in sight, while bitcoin’s fees reach all-time high , above $1, with users yesterday complaining about unconfirmed transactions.

Maybe some new proposal will be able to bridge the divide, but what we’ll probably see is a repeat of the same old story. Firstly, nitpick every little thing in showing strong opposition, then smear the proposal’s name, then its devs, then whoever supports it, then DDoS.

This time, though, all of it is getting far too boring, like those Hollywood movies that keep repeating the same story-line.

Featured image from Shutterstock.