With the possibility of a Bitcoin hard fork, two possibilities stand before developers, miners, and other stakeholders–each presenting its own set of potential outcomes and pitfalls. While the future of the payment network and currency are uncertain, some companies within the blockchain ecosystem, such as BitGo and Circle, have advised–even urged–customers to take action.
Just like the Judgement of Solomon, there are two choices: Bitcoin Unlimited or Segregated Witness. However, unlike the parable, evidence suggests a rather grisly end to our modern day application.
As the debate rages on, here’s what you need to know during this tumultuous time.
Bitcoin has a one megabyte size limit on blocks. With increased demand on the network, process times for payments have lagged due to data limits for each batch of transactions. What once took a few seconds, now, may take hours.
Furthermore, bitcoin transaction fees skyrocketed in 2016, and may continue to do so within the network–a benefit to miners, but only for so long.
Bitcoin Unlimited is an alternative to Bitcoin Core. This option would allow for an increase in block size limit in order to expedite confirmations on the network. It effectively gives the power to miners.
While this all sounds great, it is important to note that this newly created currency would be incompatible with the current Bitcoin. Chances are this will be a contentious hard fork, with the chances of BC moving to Unlimited being slim to none.
This option would keep the cryptocurrency more decentralized. Some argue that SegWit would reduce the size of transaction fees and align node costs, while potentially resolving the malleability bug in the Bitcoin protocol.
That being said, it is a temporary solution. Bigger blocks are needed to support the transaction demands in the current network.
As the legitimacy of Bitcoin and other cryptocurrencies are established many are calling for a long-term solution least we find ourselves at yet another fork in the road.