Bitcoin Core to Get SegWit Soon, Still a Long Way to Go for Implementation

The Bitcoin protocol may soon expect few changes to happen for good. Segregated Witness, also known as SegWit, which happens to be one of the scalability solutions is finally ready for release.

The Bitcoin Core development team has reportedly fixed most of the issues related to SegWit v 0.13.1 software package. The latest version is almost ready to go live in its current state by Monday. However, it may take at least a year for it to be implemented as it still needs to garner support from 95 percent of the mining community.

bitcoin segwit

The SegWit protocol is expected to increase the efficiency of the Bitcoin protocol by reducing the time taken to calculate the transaction hash for verifying transactions. It is achieved by separating malleable parts of the transactions from the transaction hash; thus, effectively reducing the number of calculations to be made by the Bitcoin network for verification. The implementation of SegWit is also expected to further strengthen the Bitcoin protocol by preventing malleability attacks.

Successful implementation of Segregated Witness will also accelerate the development and implementation of much awaited Lightning Network. The binary code for the latest version of SegWit is currently available on GitHub. Until now, the developer community have fixed over 70 issues. Even though few developers claim that the SegWit codes are ready for deployment at its current state, it may not be released until November 15, 2016, as stated by developer Pieter Wuille.

The implementation of SegWit will involve a Bitcoin soft-fork, which may not go well with certain Bitcoin community members who are inclined towards a hard fork to increase the minimum block size. Alternatives to Bitcoin Core — Bitcoin Classic and Bitcoin Unlimited are also receiving traction in the recent days.

Even though the Bitcoin Core development team has made great progress with SegWit, the delays due to internal conflicts among the Bitcoin community has delayed scaling of the Bitcoin network. If the current pace of development and deployment continues, the digital currency will soon head towards serious trouble due to increased transaction loads and processing time.

Ref: GitHub | Twitter | Main Archive |Bitcoin Core | Image: NewsBTC

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The Bitcoin ecosystem is divided into multiple camps. With the lingering scalability issues, and other proposals representing an immediate solution to this problem, there is an interesting mid shift taking place. As it turns out, the majority of miners is still supporting Bitcoin Core in the block size debate. But they are losing ground at a rapid pace.

Right now, there are different proposals on the table to solve the Bitcoin scalability issue. One thing everyone seems to agree on is how the block size will need to be increased. By how much that increase will happen, remains to be seen, though. Bitcoin Core, which is the main branch of development, is working on Segregated Witness who would warrant a 2 MB block size.

Based on block size voting results, only 27.94% of the community is for the Bitcoin Core solution. Do keep in mind nearly one in four did not vote yet, and their preferences could go either way. Even if we were to add up that 22.01 % of non-voting miners to the support Bitcoin Core has, they would fail to reach 50%.

Miners Stopped Caring About Scalability Preferences

Bitcoin Classic seems to be the “best of the other solutions” right now. Created several months ago, Bitcoin Classic votes for an immediate block size increase by hard forking Bitcoin. This concept has been subject to much debate already, as a hard fork implements a significant security concern for the future of Bitcoin.

Other solutions, such as Bitcoin Unlimited – 2.54% -, Bitpay’s Bitcoin – 2.45% – and BIP 100 – which introduces 8MB blocks right away – are all seeing much less support. It is positive to see so many different solutions on the table right now. Unfortunately, that also means a lot of Bitcoin miners have stopped caring about the outcome, as long as there is a solution on the horizon.

To be more precise, a total of 26.84% of Bitcoin miners doesn’t care which scalability solution is implemented. This does not mean they stopped caring about the issue, though. The ongoing bickering between the different solutions is putting a lot of stress on the Bitcoin ecosystem as a whole. Without a proper solution in place, the number of miners who don’t care about which outcome “wins” will only grow larger.

For the time being, it appears the scalability concerns will not be resolved anytime soon. When even the miners do not care enough to pick a favourable solution, it becomes apparent something will need to change. A solution to this lingering problem is direly needed.

Source: Reddit

Header image courtesy of Shutterstock

For those people who assumed the Bitcoin block size debate was settled once and for all, bust open the popcorn yet again. Chinese mining pools are colluding to hard fork and support 2MB blocks. In doing so, they would go against everything Bitcoin Core has been working on so far, and use Bitcoin Classic instead.

The Bitcoin block size debacle has been a source of great controversy for nearly a year now. Many experts feel the Bitcoin block size needs to be increased, yet there are different ideas as to how this will happen. Bitcoin Core developers have a roadmap to implement Segregated Witness, which is a [temporary] solution to the block size. Bitcoin Classic, on the other hand, recently unveiled their new client which increases the block size to 2MB right now through a hard fork.

An Attempt to Hard Fork Bitcoin

As it turns out, various Chinese mining pools are in agreement they will hard fork and switch to 2MB shortly. In doing so, they will also switch from Bitcoin Core to Bitcoin Classic, and solve any lingering network congestion problems. In the mining pool operators’ opinion, Bitcoin Core defaulted on a block size consensus, and they do not honor the desire to increase blocks to 2MB. BTCC is the only mining pool which has not agreed or disagreed with this plan so far.

This proposal goes by the name of “terminator”, which is an interesting term. According to Reddit, this has to do with “terminating” Bitcoin Core 0.13.1, which would not honor the consensus achieved during the Scaling Bitcoin HK meeting a few months ago.

This hard fork decision by Chinese mining pools requires a lot of collaboration from the mining community, though. At least 75% of all network hashrate will need to agree to the Terminator plan. Once that threshold has been surpassed, the new Terminator mining pool will switch to Bitcoin Classic as well. In doing so, they will push Bitcoin Classic support to over 90% of the network.

Mathematics also show us that it would not take much to oppose this change. Any mining pool – or group of pools – owning over 10% of the network hashpower can effectively veto this change. The Terminator mining pool controls roughly 15% of the network, whereas the other 75% will need to come from other miners themselves.

It is important to note these details are not officially confirmed by any of the Chinese mining pools right now. The block size debate has been going on for far too long, and a solution needs to be implemented today rather than tomorrow. However, this plan is very bold, and sounds a bit unrealistic. Then again, one never knows what comes next in the Bitcoin world.

Source: Reddit

Header image courtesy of Shutterstock

For those people looking to see the Bitcoin block size debate coming to an end, that will not be happening anytime soon, unfortunately. Things have gotten more interesting a few weeks ago when rumours started appearing about BitPay looking to implement their own Bitcoin block size solution. This new adaptive block size solution holds some interesting merit, although it remains to be seen whether or not this solution will ever be implemented.

Also read: Bitcoin Price Technical Analysis For 03/22/2016 – Can BTC Make It?

The BitPay Median Block Size-based Solution

Although both Bitcoin Core and Bitcoin Classic each have their own benefits and drawbacks regarding creating a block size solution on the software side, the BitPay option is kind of interesting as well. Rather than sticking to a particular block size and upgrading it at certain time intervals  BitPay is looking at a median block size solution.

As the name suggests, this BitPay block size solution will impose a dynamic limit, rather than forcing a particular block size upon users at any given time. Determining the proper block size for a particular moment in time is done by looking at the median size over the last 12,960 blocks – roughly three months – and adjusting the solution accordingly.


Similar to any other Bitcoin block size solution in existence right now, consensus must be reached before the BitPay proposal is activated on the network. Scaling the Bitcoin block size depending on the number of transactions hitting the system over the past three months is an interesting approach, and should help prevent denial of service attacks as well as network congestion.

But there is more to this proposal than just that, as a dynamic block size structure would guarantee miners their created blocks are accepted by the rest of the Bitcoin network. Moreover, this BitPay solution should remove the need for any future hard forks of the network as well. Scalability has been a thorn in the side of the Bitcoin network for quite some time now, and a dynamic solution puts an interesting – and cleaner – spin on tackling this issue.

There is no denying future block size increases will be needed on the Bitcoin network, and by removing the concept of hard forking, the BitPay solution could gain a lot of traction. Additionally, this BitPay proposal gives miners moire choices regarding the size of the blocks they are generating on the network.

Chinese miners would not need to worry about explosive block size growth either, as the maximum rate of growth is capped at twice the previous size. There will be no jumps from 1MB blocks to 2MB blocks and then suddenly increase to 8 MB. This should give the local Internet infrastructure enough time to ramp up the overall network speed and [try to] get rid of data caps.

Reaching consensus will require Bitcoin community participation as the BitPay block size implementation requires a 75% livenet nodes threshold – as well as 51% of test nodes – to activate on the network.  Unfortunately, older clients who are deployed for full transaction validation are not compatible with the changes proposed in the BitPay solution, and will result in those clients no longer being a part of the longest blockchain.

In the end, it remains to be seen whether or not the BitPay solution will be embraced by Bitcoin miners in the end. Bitcoin Classic gained a lot of initial support but seems to be struggling to carry on with that trend. Bitcoin Core remains the strong leader for now, even though this approach will take quite some time to come to fruition.

Source: GitHub

Image source 1

Bitcoin is in trouble; it has become a well-known fact by now. Be it the recent post by Brian Armstrong, the CEO and founder of Coinbase where he explains his take on the happenings at the Satoshi Roundtable conference held late last month.

Now the CEO of Blockchain, Peter Smith has also explained the stuff that went on at the event. Both the versions paint a grim picture of Bitcoin’s future. The supposedly decentralized cryptocurrency, bitcoin is apparent as centralized as it can get at the development level. The Bitcoin Core developers in their hopes to create a perfect monetary system are killing bitcoin by going against its very principle.

The ongoing block size debate is nowhere close to being resolved. The main “Bitcoin Community” comprising of Bitcoin Core developers, bitcoin companies, miners, wallet and exchange service providers are still standing their ground, unyielding and leading the whole process to a standstill. There have been multiple proposals floated around so far, and none of them reached the consensus required for implementation.

While they drag things along, the whole Bitcoin network is edging towards oblivion. The effects of stagnation in Bitcoin development is now becoming increasingly visible. Recent events in the past few days are a classic example of where this is leading to. Peter Smith explains that the recent overloading incident experienced by the Bitcoin network is not due to the spam transactions as reported across the social media and news publications. According to him, the reported spam transactions originating from that particular wallet made up to less than one percent of the total bitcoin transactions processed by the network. Most of the transactions on the blockchain were genuine and they were made between bitcoin wallets and exchanges.

READ MORE: Core Developers May Spell Bitcoin’s Doom – Brian Armstrong

Increased traffic on the blockchain has created transaction backlog, leading to an increase in the average mining fee for transactions to be processed. Bitcoin users are currently paying more for less now in order to execute their transactions. The recent increase in the number of bitcoin transactions from individual wallets to bitcoin exchanges can be attributed to early stage capital flight. The impending problems with bitcoin, if adequate steps towards scalability are not taken have reduced the confidence on bitcoin among people and they are preparing to liquidate their digital assets. This presents a grim outlook for bitcoin.

Considering the developing situation in the bitcoin ecosystem, Peter Smith urges Bitcoin developers to introduce changes towards sustainability of the platform without waiting for a perfect solution. Peter Smith is also pushing for the adoption of Bitcoin Classic, at least for the time being, to keep the Bitcoin network alive.

It is high time for the development community to start focusing on immediate small wins by fixing things that need immediate attention instead of waiting for a fix-all solution. Bitcoin was created as a peer-to-peer fund transfer solution and not a payment settlement system as the current Bitcoin Core development team is trying to portray it. Guess, we just have to wait a bit to see if bitcoin is going to pick itself up or go down without giving a fight.

Ref: Bitcoin Scaling and Choices- Peter Smith

The bitcoin block size debate is the classic example for the term “running around in circles”. Those of us who have been following thins know very well that the debate about increasing the block size has been going on for almost a year now and yet we do not have any results to show for it. There have been proposals to solve the issue, most of which were never accepted. This prolonged disagreement in spite of holding several talks, round table conferences etc. shows signs of a much deeper problem with the whole setup.

The CEO and founder of Coinbase, Brian Armstrong offers an insight into the dynamics of the Bitcoin community as observed by him during the recent Satoshi Roundtable Conference. According to him, there is a great divide between all the primary stakeholders of the Bitcoin community and they do not see eye to eye with each other.

The main issue here seems to be the very people who have been working on the bitcoin protocol, followed by the growth-hungry bitcoin companies and the miners caught in between wondering whose side to pick. Brian Armstrong, in his blog post, mentions that the Bitcoin Core developers are the ones who are currently hampering the block size increase and bitcoin scalability.

Mike Hearn had recently created a controversy by calling bitcoin a failed experiment and the Bitcoin community is not working the way they were supposed to work. He predicted the whole Bitcoin Network to collapse in the coming days if it continues. Comparing his notes with that of Brian Armstrong’s it is impossible to ignore the role of core development team in the dysfunctional community relationship. A handful of people are holding the whole bitcoin at ransom because they are not interested in working on any alternative solution than their own. They prefer their solution to be perfect, but the bitcoin protocol is far from perfect. Even their perfect solution for the bitcoin infrastructure may not help much with the scalability on a long run.

READ MORE: Mike Hearn Resigns and Leaves Bitcoin Permanently

They are against hard forking the blockchain by implementing Bitcoin Classic as they fear it may lead to centralization. But without the hard fork, the Bitcoin Network may collapse by mid-2016. These highly intellectual Core developers are neither receptive to fresh developers joining the community nor good at communicating with the community.

As the Core developers fight to maintain control over Bitcoin, the upcoming bitcoin halving may spell doom to the digital currency. In the absence of any new improvements to the block size, Brian estimates a drop in hashing power as miners start to drop out due to reduced profitability, leading to increased block discovery time. In a worst case scenario, it will cause backlogs in transactions for more than a month, driving mining fees through the roof.

As an immediate solution, Brian Armstrong urges the Bitcoin community to adopt Bitcoin Classic, increasing the block size to 2 MB. Once the Bitcoin Classic is adopted, it will buy some time for the developers to figure out new scalability approach. Like bitcoin, he also wants the development to be decentralized. Developers other than the Core developers should also be able to contribute to the development process. This way, they will be able to provide better workable solutions to bitcoin scalability than the core developers who are currently stuck to perfection at the risk of losing the whole Bitcoin Network.

Ref: What Happened At The Satoshi Roundtable

Bitcoin was first introduced in the year 2009. Since then the digital currency’s network has been growing non-stop. Over the past few years, bitcoin network has grown over multiple times but not much changes have happened on the technical side since its inception.

The bitcoin block size has remained at 1 MB since the beginning and in order to ensure the survival of bitcoin, it is very important to increase the block size. The bitcoin community has realized the severity of the situation and there have been multiple attempts to increase the block sizes since then. However, being a distributed decentralized network any changes to the blockchain can be made only after a consensus is reached by a majority of the community.

Some of the Bitcoin Improvement Proposals for increasing block size includes BIP-100, BIP-101, BIP-102, Bitcoin Classic and more. However, all these proposals have been shot down by one segment of the bitcoin community or another. These proposals were rejected mainly due to self-serving reasons or apprehension about the validity and impact of  the proposed changes. The bitcoin mining community has been very vocal about block size increase since the beginning, at a cost of the whole bitcoin ecosystem.

Bitcoin miners are responsible for supplying the required processing power to keep the bitcoin network operational. The processing power contributed by miners is used to discover new blocks on the blockchain and process all bitcoin transactions happening over the network. For their contribution, they receive fresh bitcoins as a reward. As bitcoin network grows, the processing power required for mining bitcoin also increases. The increased processing power requirement is in direct correlation with the increasing complexity of mathematical problems that has to be solved to discover new blocks. Mining bitcoin is not possible with normal PCs or graphic processing units anymore like it was before. Most of the mining operations are now carried out by expensive and highly powerful application specific integrated circuits designed exclusively for that purpose.

Setting up a mining operation requires a lot of money and it is almost impossible to mine profitably with just one ASIC. This has led to companies with enough capital to set up data centers with hundreds of miners. This has led to massive commercialization of bitcoin mining, and a handful of such mining companies contribute almost all the mining power required to maintain the network.

Can Bitcoin Play Catch-up with Visa?

While everyone is busy debating about the proposals, no one is actually looking closely at the technical side of the equation. What needs to be done technically to increase the block size, or to increase the rate of transactions over the network. In the present state, the network is no capable of processing more than 7 transactions per second. According to an article in MIT Technology Review, the current bitcoin design is inefficient and it is capable of processing only 27 transactions per second, even with a block size of 4 MB. So, unless the developers pull up their socks and start working on redesigning bitcoin network, the digital currency will never live up to the expectations.

If bitcoin has to become a mainstream mode of payment, then it should be a lot better than what we have in our hands today. Visa processes over 2000 transactions per second and it is capable of handling as many as 50000 per second if required. Will bitcoin ever be able to compete with that? From where we are standing it doesn’t seem so. But fret not, for there is still some hope, as long as someone is working hard enough to change it.

Blockstream is one such company that is currently developing parallel networks that can process bitcoin transactions. If these parallel networks can work in tandem with blockchain, then we may be able to reduce the load on blockchain by distributing the load across the parallel networks as well. However, it still needs to be tested and for bitcoin’s sake, we hope it works.

Ref: Technical Roadblock Might Shatter Bitcoin Dreams

The future of Bitcoin development has taken an interesting turn in the past 24, as the Bitcoin Core developers and close to 80% of the network mining power – read: pool operators – have agreed on hard forking Bitcoin. Such a magnanimous event is a world’s first for the bitcoin ecosystem; a shard forking has been out of the question up until now. But what will this agreement do for Bitcoin Classic? Such an agreement would prevent this alternative solution from reaching its activation point.

Also read: Bitcoin Price Surpasses US$455; Moving Towards US$500

Bitcoin Core Devs And Chinese Mining Pools Agree

While a solution to the seemingly infinite Bitcoin block size debate is very positive for the future of bitcoin, there are are always two sides to a story. In this case, it looks like the Bitcoin Core developers have managed to sway the minds of Chinese mining pools, which represent close to 80% of the total Bitcoin mining power.

Up until this point, a hard fork in the future of Bitcoin development would have been out of the question. Neither the Chinese mining pool operators nor the Bitcoin Core developers were too keen on going down this road, as hard forking Bitcoin proves to be quite the challenge, and brings a lot of risks to the table.

But for some reason, Bitcoin Core developers have changed their mind and taken a similar approach to the solution presented by the Bitcoin Classic team. There is one major difference between the two, though, as Bitcoin Classic wanted to fork hard Bitcoin sooner rather than later. It is impossible to say whether or not their solution will effectively work out properly, but it certainly has sparked the efforts by Bitcoin Core.

Some people might even argue how Bitcoin Classic is indirectly responsible for the Bitcoin Core developers to get their act together. There will be people who will refute such a statement, but the similarities between both ideas can not be denied so easily. Regardless of how things will play out eventually, Bitcoin is in line for a hard fork at some stage.

Granted, various mining pools had outspoken a preference for hard forking Bitcoin over implementing Segregated Witness. But even that decision has changed, as the Chinese pools are now on board with implementing Segregated Witness before the hard fork is set to occur several months later. Something has changed the minds of a lot of people, and it seems unlikely a few presentations are the cause of this mind shift.

Deliberate Attempt To Disrupt Bitcoin Classic Activation Threshold?

With so much support for the new Bitcoin Core proposal – in theory, at least – Bitcoin Classic supporters might find themselves in a bit of a pickle very soon. One of the major interesting points about this development solution was how a certain amount of mining power needs to convert to Bitcoin Classic to activate the block size increase “threshold”.

If the Bitcoin Classic solution can not be adopted by the majority of the Bitcoin network, this solution will eventually die out as Bitcoin Core will soft fork the block size increase through Segregated Witness. On paper, it comes down to who can reach majority consensus first before April of 2016, heralding an exciting few weeks for Bitcoin as a whole.

In the end, Bitcoin Classic seems to have spurred a different breed of development into the minds of Bitcoin core developers. It is also the very first time Chinese mining pools and developers seem to agree on something as contentious as a hard fork solution. Whether these are signs of maturity or more politics, is unknown at this time, but this situation sets an interesting precedent for sure.

Source: NewsBTC

On February 21, 2016, popular bitcoin wallet platform and vault solutions provider Xapo CEO Wences Casares announced that the company is planning to upgrade to Bitcoin Classic, with a vision to help the Bitcoin network scale efficiently.

Bitcoin Classic is a hard fork bitcoin block size increase proposal currently supported and led by Bitcoin Core developers Gavin Andressen and Jeff Garzik, and industry leaders including Coinbase and Circle. If Bitcoin Classic achieves the 75% support threshold and becomes successfully implemented, the Bitcoin block size will be increased to 2 megabytes immediately, hence the name hard fork.

However, the announcement of Xapo has become controversial amongst the community and existing Xapo users, because the implementation of Bitcoin Classic could lead to a split chain, an event in which two Bitcoin chains co-exist in the same network. Historically, if two Bitcoin chains co-exist in the same network, the minority becomes eliminated almost instantly, unifying to one single chain. Thus, if Bitcoin Classic overtakes the Core chain, the Bitcoin network would be unified to the Classic chain that is controlled and maintained by another team of developers with a separate vision.

Because of this possibility, Xapo users have begun to call the move of Xapo a “anti-Bitcoin camp,” as in theory, eliminates the existing Bitcoin chain and creates a separate coin developed by a separate entity.

Xapo users have also begun to question the motivation and intent behind Xapo’s decision to support Bitcoin Classic and overall scaling of the Bitcoin network considering their absence in various scaling conferences and round tables held in Hong Kong and Montreal during the past few months.

Still, many bitcoin enthusiasts in the community are praising Xapo’s attempt to help the scaling of the Bitcoin network and initiatives led by leading companies such as Coinbase and Circle.

@wences Awesome to see Xapo continues to deeply understand bitcoin as ideal-money, with low-friction & adoption network-effect being key.

— Dan McArdle (@robustus) February 21, 2016


Antpool, a bitcoin mining pool owned by leading bitcoin mining hardware manufacturer Bitmain Technologies Ltd. has officially marked the start of the production of Bitcoin Classic blocks on February 16, 2016.

Bitmain’s Antpool is by far the largest bitcoin mining pool in the industry, and controls over 26% of the Bitcoin network’s hashrate distribution. Hashrate is a measuring unit used to estimate the processing power of the Bitcoin network. Miners must generate an adequate level of hashrate to find blocks of transactions on the network, to secure and encrypted payments. Currently, Antpool generates 289.6 petahashes per second, with its 478,683 workers.

The official support from Bitmain/Antpool totals the number of Bitcoin Classic miners to seven, including other major bitcoin transaction processing firms such as BitFury, BW, HAOBTC, KnCMiner, Genesis Miner and Avalon Miner. With BItFury, KnCMiner and BW controlling 25% of the bitcoin mining pool market share, essentially, the hashrate of mining pools supporting Bitcoin Classic amounts to a staggering 51%.

Bitcoin Classic is a hard fork block size increase proposal drafted led by Jonathan Toomim. The proposal to increase the block size immediately by 2 megabytes is currently supported by Bitcoin Core developers including Gavin Andresen and Jeff Garzik, who previously suggested a Bitcoin Improvement Proposal to increase the block size by 2 megabytes.

With growing support from leading companies such as Coinbase which are running various tests to evaluate the efficiency of Bitcoin Classic and the 2 megabyte Classic chain, it is highly likely that the Classic chain could co-exist with the core chain in the future. If this happens, wallet platforms and exchanges will support both chains and verify the transactions from the Core and Classic chains.

However, Coinbase CEO Brian Armstrong recently emphasized that historically, when a split chain occurred, the minority was eliminated in a matter of hours. Armstrong predicts that the same would happen for the Core chain if Classic becomes activated.