BIP 91 has officially locked in

The controversial Segwit2X (BIP 91) has now locked in, marking a significant milestone in the cryptocurrency’s history. The update will be activated in roughly 58 hours. Segwit2X aims to activate both the Segregated Witness update and a 2MB block size limit hard fork months later. The successful implementation of these two stages will see the Bitcoin block size and, consequently, its transaction throughput increased by fourfold. 

The Segwit2X voting stage was pushed forward as an emergency measure, one that ensured the BIP 148 UASF did not take place. This was a crucial matter, as the UASF would see the Bitcoin blockchain split in two due to the contingency plan announced by Bitmain and others. This plan included the launch of a new Bitcoin client known as BitcoinABC, which would activate the chain split, leaving two Bitcoins: one with segwit and one without.

Few pools opposed the update, including F2Pool, Kano CKPool and, the latter of which was signalling for Segwit2X but stopped doing so during the course of the day.

In the hours leading up to the activation of Segwit, the price of Bitcoin rose sharply, reaching the $2900 mark. However, the price declined moments prior to the Segwit confirmation, currently sitting at $2740. See live charts here

What is Segwit?

Segwit, short for segregated witnesses, is soft fork proposal presented by the Bitcoin Core team. It was released on the 0.13.1 version of Bitcoin Core client. Segwit allows the witness data (signatures) in transactions to be counted in a different way, allowing each 4MB of data to be read as 1MB. Since witness data makes up roughly half of the transaction size, blocks (which are still 1MB) can have twice as many transactions.

Apart from the capacity upgrade, SegWit provides other advantages, one of which is fixing transaction malleability. This fix allows second layer payment channels like the Lightning Network (LN) to be implemented in Bitcoin, providing faster transactions and off chain scaling. Other advantages include multi signature transactions, linear scaling of sighash operations, script versioning and more.

What is Segwit2X?

Segwit2X is a Bitcoin scaling agreement that was signed by several companies in the industry, including mining pools which made up more than 80% of the total hashrate. The agreement seeks to activate Segwit, which is now locked in, and to activate a 2MB hard fork within six months. The companies that came together have also agreed to work together for the good of Bitcoin ecosystem. The announcement reads:

“We are also committed to the research and development of technical mechanisms to improve signaling in the bitcoin community, as well as to put in place communication tools, in order to more closely coordinate with ecosystem participants in the design, integration, and deployment of safe solutions that increase Bitcoin capacity.”