Bitcoin Hard Fork Suspended. What’s next?
The Bitcoin community had been waiting for the cryptocurrency’s hard fork with both excitement and fear for almost a month. The aim of this hard fork was to integrate a new protocol, Segwit2x, in Bitcoin’s net infrastructure. This protocol could improve some imperfections in current Bitcoin software, for example it would increase Bitcoin’s transaction capacity to 2MB per transaction. Today this transaction capacity is strongly constrained by the software’s rules.
But suddenly, and with little notice, the leaders of Segwit2x project decided to suspend their attempt to increase the block size through a hard fork in an unprecedented move in the crypto industry. Their main reason — the scaling proposal is very controversial within the bitcoin community, and therefore Segwit2x project can’t move forward. This announcement has been endorsed by companies that originally supported the plan. These companies include Xapo, Bitmain, Bloq, Blockchain, Shapeshift and others.
Mike Belshe, one of the leaders of the Segwit2x project wrote: “Unfortunately, it is clear that we have not built sufficient consensus for a clean block size upgrade at this time. Continuing on the current path could divide the community and be a setback to Bitcoin’s growth. This was never the goal of Segwit2x.”
“We are big fans of increasing the block size, as our customers really get impacted by the fees, but we want to see it done in a responsible way that brings the entire community together and takes into account more voices,” wrote Coins.ph founder and CEO Ron Hose.
At the same time, Segwit2x developers and supporters still hope that the block size increase to 2 MB will take place further down the line. Perhaps, they argue, this move will get more agreement from stakeholders in the near future, and the hardfork will take place. Regardless of Segwit2x’s delay, one of the main project developers, Jeff Garzik, said that the alternative software update will continue to be developed.
BTC Price Reactions
Immediately after the hard fork cancellation news broke out, Bitcoin’s price, which had exploded to new all time heights, receded slightly. Prior and on Nov. 8th, Bitcoin’s price hiked to almost 8,000$. This inflation was not a big surprise in the market because users anticipated a crypto-cash injection of the new Bitcoin variation. The upcoming SegWit2x integration had been a major factor in driving the bitcoin price to new heights, and as a result, bitcoin’s price quickly decreased to its previous point or around 7,300$ per coin.
This seems to contract some analysts’ prediction of the highly anticipated 10$ 000 per Bitcoin target. For the upcoming weeks and until the end of the year, the hard fork termination will remain a major factor on whether or not Bitcoin’s price continues to growth. With consensus, the current Bitcoin ecosystem has a good chance of healthy and steady development until the end of the year, as long as another proposed fork doesn’t increase market risk and uncertainty.
What can we expect in Bitcoin’s future?
Indeed, the November’s hard fork has terminated, but Bitcoin still needs to continue to scale. Maybe the idea of increasing transaction size will be necessary to accommodate new user growth, but only time will truly tell. Until then, Bitcoin’s infrastructure can’t seem to handle all of us. We all want Bitcoin’s network to work smoothly and efficiently, but it is impossible without some serious modifications on its current software infrastructure.
“We’ll either bring bigger blocks to people, or we’ll bring the people to bigger blocks,” said Bitcoin developer Peter Rizun.
The community will discuss this problem in the near future; for example, at Scaling Bitcoin, a two-day long technical conference at Stanford University is taking place this weekend. We all know that Bitcoin must be somehow modified. The main question is HOW. Besides increasing block size, Bitcoin has to become more secure. This means ensuring more transaction privacy while maintaining ease in its usability.
One of the possible solutions is Lightning, an integrated decentralized network using smart contract functionality in the Bitcoin blockchain; Bitcoin still lacks these smart contracts capabilities. This solution promises instant payments, easy scalability, low cost of transactions and cross blockchain communication. But even Lightning might not be good enough of a solution until Bitcoin increases its block size. Aviv Zohar of the Hebrew University is sure of that.
Some Bitcoin supporters are confident that the main goal now is to unite the community. If it is strong enough to unite after Segwit2x’s “scandal”, all current dilemmas on Bitcoin blockchain infrastructure can be solved.
“Let’s take Segwit2x’s failure as a learning experience — Bitcoin’s community is strong, and needs to broadly support any changes to Bitcoin’s consensus rules,” Bitcoin developer Matt Corallo tweeted.
What does it means for Altcoins, like Hamster?
Hamster Marketplace is a decentralized non-profit marketplace for niche electronic goods and emerging brands that has planned a Token Offering for later in the year. With its capped Tokens and buy-back programs, Hamster offers arguably the most risk-averse investment in the Crypto space.
However, even high quality tokens, like Hamster’s, saw a fall in pre-sale involvements as Crypto owners flocked back to Bitcoin in anticipation of the fork. Usually the 1–2 weeks period before a hard fork are extremely critical for all crypto initiatives. Almost all important operations stop, because the possibility of technical problems affecting crypto assets and transaction is very real. In the past, Coins have been sent yet never received by the appropriate user. In other words, a hard fork can be compared to ICO hell.
But with the terminated hard fork, the danger and doubt has receded from the market. Since the announcement of Segwit2x’s cancellation, Bitcoin price has dropped, Altcoins have ramped up huge bull runs and Hamster’s pre-sale performance has returned to normal!
We, the Hamster team, will continue to do our best in effectively carrying out our Hamster ICO. There are no obstacles ahead as important as the Segwit2x hardfork anymore, and we expect to kickstart our ICO in the coming weeks and realize our vision! We expect a steady and continues rise in Bitcoin price until early next year, and we hope to share our success with you following our ICO.