Bitcoin Scaling Civil War
Just when everyone thought it was over, the bitcoin ‘civil war’ resurfaced in June when major mining firm Bitmain announced the launch of a user- activated hard fork (UASF).
In May, a majority of blockchain industry bigwigs reached a consensus regarding the bitcoin scaling solution and agreed to enable the Segregated Witness (SegWit).
The SegWit was supposed to be a soft fork, a temporary solution to make bitcoin’s software protocol handle the growing transactions burden.
“The prospect of a bitcoin fork isn’t enticing for bitcoiners as it highlights the inability for the project to move forward and the divisiveness in opinions on how to do so,” Charles Hayter, co-founder and CEO of cryptocurrency data platform CryptoCompare, had earlier told Moneycontrol.
“The scaling debate has been around for two years now and the ramifications of the present state of play lead to a number of price-sensitive scenarios that are not positive.”
In case of a hard fork, if the bitcoin blockchain splits, users are at risk of losing their bitcoin. Bitcoin experts have suggested to not make transactions during the uncertain time period around August 1.
If the Bitmain hard fork happens then there would be two legitimate Bitcoin ledgers on August 3rd. The soft forked version of Bitcoin and the newly forked Bitmain Bitcoin.