The long-awaited Segregated Witness (SegWit) update has finally been activated, although you wouldn’t know it if you were looking at a price chart. SegWit has been the main focus within the Bitcoin community and although many were expecting the price of BTC to go crazy, not much has changed in the markets.
SegWit was activated on the Bitcoin network at approximately 2:00 UTC. The first SegWit block was mined by the China-based BTCC pool. The update allows the block size limit to be replaced with a block “weight” in which each Witness data Byte is counted as 0.25 Bytes. Given that witness data accounts for nearly half of the transaction size, the SegWit upgrade will allow for a 2x increase in capacity.
Most importantly, SegWit will also fix the tx.malleability bug, paving the way for payment channels like the Lightning Network (LN) to be built on top of Bitcoin and allowing off-chain scaling solutions to be persued.
What about the price?!
So what happened? Were you also expecting a huge pump/crash? Well, Bitcoin never ceases to amaze and given the wild volatility we have all grown used to, many were actually surprised to see Bitcoin trade sideways following the update.
Bitcoin has remained fairly stable in the $4100-$4200 range with no huge spikes in volume. So what caused traders to shrug off SegWit? Well, when one looks at the huge rally that has taken BTC to the $4000 mark, it’s easy to see that SegWit was already being factored into the price.
Given that the proposal had been locked, SegWit was pretty much a sure thing. However, the scaling debate isn’t quite over yet.
What’s next for Bitcoin and BCH?
Now that SegWit is “out of the way”, there is still the 2MB hard fork that will increase Bitcoin’s transaction capacity even further, bringing it up to the equivalent of 4MB. Although this isn’t a definitive solution for Bitcoin, it will allow it to accommodate the current upsurge in user base.
Some members of the developer community have voiced their concerns and complaints regarding the technical dangers and lack of planning that has been put into the SegWit2X agreement, claiming that it’s a rushed upgrade and that an hard fork should be better planned. However, one must also realize that there are compromises that need to be made in order to find a solution that can please various factions of the community, something that was never accomplished before the SegWit2x agreement.
As for BitcoinCash, the UAHF blockchain has recently gone through a difficulty retargeting event, reducing profitability for miners. However, there are still those who are betting on the new Bitcoin, as can be seen through the recent mining uptick here.