The incoming fork is a software change from having all transactions (measured in bytes) fit into 1 megabyte (1 million bytes, or 1mb) of data, processing an average of 3 transactions per second (tps), to 2 megabytes of data (2mb), increasing the tps accordingly.
However, there is an element within the bitcoin community that prefers to keep running the 1mb version of the software, restricting the smaller network to 3tps.
Some believe that there will be a fork, and that both coins will continue to co-exist and each will retain a high value, part of the argument is “which coin will gain the most value, or the current BTC ticker and the value and infrastructure that comes with it”.
Recently, on August 1st, there was a similar disagreement with the direction of Bitcoins development, and a group splintered off (forked) by changing the software they would run to include bigger blocks (Bitcoin Cash, BCH). Because of the Emergency Difficulty Adjustment (EDA) employed by BCH it has allowed it to survive and coexist. And whether people went into BCH or BTC, everyone profited at the time of the fork.
This will not be the case with 1x vs 2x as neither of them have integrated an EDA. Everyone who holds “BTC” will have the copy of coins, but the chains will be fighting to the death, the winner will take all. As one gains more hashpower the other will start to propagate blocks slower, if the NYA is to be honoured, then the majority of the hashrate will quickly move to 2x and 1x will be stagnant. Users outside of exchanges will not be able to move coins so well, if at all. And the amount of users trying to move coins in a congested 1mb scenario will be interesting to witness to say the least. It is this writers humble opinion that it will become very congested, transaction speed will slow to a snail’s pace and fees will sky rocket as people add to the confusion with Replace By Fee (RBF).
What will exchanges and platforms call 1x and 2x?
This seems to be a bit of a grey area. Not too much news has come out as yet, though some large entities, such as Coinbase have stated their opinions.
However, some customers asked us to clarify what will happen after the fork. We are going to call the chain with the most accumulated difficulty Bitcoin.
However you need to make sure you read the entire blog post and its previous one. Coinbase will be calling the existing chain Bitcoin and the Segwit2x fork Bitcoin2x. It is not until an undetermined time after the fork when they will consider that the network is in a stable enough state will they make it clear as to which fork will retain the BTC ticker.
I point out the Coinbase example as they are one of the largest entities in this sector, and it is likely that other such businesses in the sector will take a similar approach.
Will you get free 2x coins?
Yes, the other way to look at it is that you get free 1x coins, if you plan to follow the 2x fork. And if it has the majority of the hashrate, you will want to follow it.
Expect the market between 1x and 2x to oscillate wildly for some time before, during and after the fork. For how long? No one can tell you that, but the signs will come when word starts coming out that one of the chains is congested and its fee’s start rising far faster than its counterpart.
Or you can watch the hashrate. If the hash rate starts to drop significantly after the fork, and closer to the time there will be charts measuring the hashrate of 2x. Keeping an eye on these will give you a little head start as to which way the wind is blowing.
Date Published: Thursday October 26, 2017
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