Bitcoin Avoids A “Hard Fork”

You may have heard about an upcoming “split” in bitcoin known as SegWit2x.

It was canceled a few days ago, with barely a week’s notice.

It’s important to understand these events, so I’m going to tell you a little bit about how they work and what they mean.

Technically, these “split” events are called “hard forks.” They happen when a group of bitcoin miners decides it doesn’t like the rules and is splitting off to make its own version.

A new separate blockchain is created. Everyone who was previously holding bitcoin is entitled to the same number of each coin, but may have to go through additional steps to access it.

A hard fork happened somewhat recently with Bitcoin Cash (or “Bcash”). A group of miners with a sizable share of bitcoin mining power wanted a less decentralized, more payment-focused coin. The fork that resulted had no noticeable effect on the price of bitcoin, but bitcoin owners got free Bcash, which they could sell for more bitcoin or hold on to as a hedge.

Why SegWit2x’s Failure Is Good for Bitcoin

In this most recent case, the newly forked coin would have been SegWit2x (S2X).

Some 80% of miners were signaling support for this fork at one point. But the original bitcoin community strongly opposed SegWit2x.

Importantly, the founding core development team of bitcoin was strongly against this change. It would have meant moving away from Bitcoin Core, the Bitcoin Foundation’s “core” software. So the people who’ve always run bitcoin’s core code (very well) would no longer be in a position of influence.

It could happen. The market could decide it doesn’t like Bitcoin Core’s code anymore and switch to something else. But it hasn’t happened yet, because the community still supports Bitcoin Core developers’ vision for bitcoin, and they put out quality code.

Only miners and exchanges seemed to want this fork. On Twitter, users were adding #NO2X tags to their profiles in droves.