The bitcoin scaling debate heated up over the weekend, following a controversial blog post from payment processor BitPay. In the post, the company urged users to update their nodes before Segwit activation to avoid security risks. What incited controversy is that they directed people to download btc1 nodes, which are designed for Segwit2x implementation. BitPay is a New York Agreement signatory, so it’s not surprising that they want to promote btc1. However, many prominent figures accused BitPay of using deceptive–or even fraudulent–tactics to accomplish their goal. In reaction to the post, BitPay was removed from Bitcoin.org.
That same day, Segwit2x developer Jeff Garzik was expelled from the Bitcoin Core repository on Github. Garzik tweeted that his removal from the repository was indicative of a “culture of reprisals.”
That this happened was not surprising; as Peter Todd noted, Garzik–who opposes Core’s position on scaling–has not made any significant contributions to the repository since 2014.
However, the timing of Garzik’s expulsion is very significant. He could have been removed at any point over the last several years for his inactivity, but it happened now, just as the Core and Segwit2x factions have grown increasingly hostile toward one another. Noting that they appear to have most of the network hashpower on their side, Segwit2x supporters claim that the Core version of bitcoin will be a “dysfunctional minority chain” once the Segwit2x hard fork takes place in November. Core supporters deride Segwit2x as an altcoin (which some have nicknamed Jeffcoin) or an attempt at a hostile corporate takeover.
Tempers have particularly flared over the issue of replay protection. Replay protection ensures that two blockchains and currencies with shared histories remain separate. Without these protections, an attacker can initiate a replay attack, whereby he broadcasts a transaction on both chains. Bitcoin cash, for instance, implemented this security measure to prevent replay attacks following its hard fork, along with choosing a new name to (somewhat) reduce user confusion.
Following the Segwit2x chain split in November, there will again be two different versions of the bitcoin protocol. This time, both versions claim that theirs is the real “Bitcoin,” while the other is not. Both users and exchanges will have to grapple with how to navigate that murky situation.
The lack of branding differential will create a great deal of confusion, but there is more at stake. Thus far, Segwit2x has not committed to implementing replay protection into the btc1 protocol, implying that the onus is on Bitcoin Core to add protection to the “legacy” chain. Core repudiated that position in a recent blog post, stating:
It is irresponsible to ignore the outcome of these events when planning for the future. As an example, we’ve seen the confusion that arises when a single address is valid across two chains, yet the Segwit2x proposal intends to repeat the same mistake. Furthermore, BCH’s implementation of strong replay protection provided significant protection to users of both BCH, as well as Bitcoin, something Segwit2x does not plan on providing.
If both development groups remain entrenched, it will be the users who suffer.
The renewed focus on this contentious debate has been accompanied by a decline in the bitcoin price. Since August 17, the bitcoin price has fallen from a record $4,467 to a present mark of $3,998 (per CoinMarketCap).
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