A battle to increase the number of transactions through the Bitcoin network descended the community into an all-out war which has lasted for the better part of three years. A few months ago two teams aligned forces to coerce their way out of this stalemate. However, the newly formed group shunned an essential faction of the community: developers.
Their solution, called SegWit2x, consisted of splitting the network to create two parallel chains in order to increase the transactions. Unsurprisingly, this “solution” led to an upheaval in the community the likes of which cryptocurrency world had never seen. However, just days before the proposed hard fork was going to go live, the coalition withdrew the plan.
SegWit2x, itself, was not without controversy. The Hard Fork went through several rounds of compromises with opposing factions trying to settle on a single solution. The compromise comes from combining the two key proposed solutions: SegWit, and 2MB block’s hard fork. The team announced its plan to cancel SegWit2x via a brief email that read:
“Our goal has always been a smooth upgrade for Bitcoin. Although we strongly believe in the need for a larger block size, there is something we believe is even more important: keeping the community together. Unfortunately, it is clear that we have not built sufficient consensus for a clean blocksize 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 hope the community will come together and find a solution, possibly with a block size increase. Until then, we are suspending our plans for the upcoming 2MB upgrade.”
This led to a huge price surge for Bitcoin topping $7,800. There were a lot of prominent backers of the project including Jihan Wu, the Chief Executive Officer of Bitmain; Peter Smith, the CEO of Blockchain, a data and Bitcoin wallet company; and Erik Voorhees, the CEO of Shapeshift; Jeff Garzik, the Chief Executive of Bloq; Mike Belshe, the CEO of BitGo; and Wences Casares, the CEO of Xapo.
The decision came at a pretty high time for Bitcoin, overall: CME had just revealed its plans to launch Bitcoin futures, its market capitalization was soaring at over $125 billion and its price was at an all-time high. Now, however, things have sobered up a bit with a shock drop in Bitcoin’s rate, which plummeted to below $6,000 in a matter of a week. This has worried the general public about the volatility of the cryptocurrency.
The original 1MB block is still strongly preferred by the majority of users, as shown by chain-split tokens. The result indicated by the tokens showed that about 85% of users favored the original versus the 15% who weren’t quite satisfied with it. It remains to be seen what the community decides on the matter of increasing the block size and how it will be able to reconcile the divided factions, now that the dust has settled.