A major split in the Bitcoin blockchain, threatening to erode the value of the cryptocurrency, seems to have been averted as a majority of miners have backed a new proposal to improve the Bitcoin system.
More than 90% of Bitcoin miners have chosen to back a proposal called BIP 91 — Bitcoin Improvement Proposal number 91 — over another proposal introduced by a set of stakeholders in the Bitcoin ecosystem.
“Ninety-five percent of the miners have already agreed to it and have signalled support for BIP 91 and the split in the blockchain is likely not happening,” Saurabh Agrawal, cofounder and CEO of Bitcoin exchange Zebpay told FactorDaily.
More than 90% of Bitcoin miners have chosen to back a proposal called BIP 91 over another proposal introduced by a set of stakeholders in the Bitcoin ecosystem
The current favourite, BIP 91, was proposed by US-based Blockchain specialist James Hilliard and was designed to prevent a split in the Bitcoin blockchain. BIP 148, an earlier proposal to improving the Bitcoin system, would have resulted in a split in the blockchain as there were two factions with opposing views on implementing the software upgrade.
Also read: Wtf is Blockchain: A definitive guide
One faction, largely made up of miners who use computing resources to maintain transaction records on the blockchain in return for a fee, opposed BIP 148 because it risks their potential to earn from mining. Meanwhile, the Bitcoin core group, which maintains the Bitcoin system, wanted to improve the network to increase scalability.
BIP 91 proposes to add some code to the current Bitcoin system, so that the network becomes faster. A major hurdle in making Bitcoins more popular has been the delay in the number of transactions. The code was to address that.
The proposal, once cleared, will implement Segwit2X, a software improvement to the Bitcoin system, and activate both “SegWit” and a 2MB block size limit in the Bitcoin system.
SegWit is short for Segregated Witness, which is the process by which blocks on a blockchain are made smaller by removing signature data from Bitcoin transactions, so that more transactions can be done in the same amount of space.
“Once Segwit 2X is activated, the bandwidth of the Bitcoin network will be doubled for a particular timeframe, which means that double the number of transactions will be confirmed on the network every time, compared to before activation,” said Agrawal.
“Once Segwit 2X is activated, the bandwidth of the Bitcoin network will be doubled for a particular timeframe, which means that double the number of transactions will be confirmed on the network every time, compared to before activation” — Saurabh Agrawal, cofounder and CEO of Bitcoin exchange Zebpay
There are a few more hurdles to be crossed before Segwit2X is implemented. “The signalling from the miners is going to take about two weeks to get confirmed. They have signalled for support, but the migration, transferring and activation will take up to two weeks,” added Agrawal.
Anticipating volatility ahead of the split, Bitcoins exchanges in India like Unocoin and Zebpay had said (1,2) that they might halt trading on their platforms if the blockchain was split. But Agrawal now feels that it may not after all be necessary to halt trading on the exchange as the split seems unlikely now.
The price of Bitcoin has increased over the weekend across markets and is inching towards the $2800 mark.
Subscribe to FactorDaily
Our daily brief keeps thousands of readers ahead of the curve. More signals, less noise.
Subscribe to our WhatsApp Alerts