Threats of the sky falling in for Bitcoin on 1st August may or may not be exaggerated. The concerns are as a result of the upgrade attempts on the blockchain, which may actually roll out in various stages over the course of the year. Although you may have already read about BIP 91 and SegWit in various other publications on and offline, it’s BIP 148 that could herald either a vast improvement in transaction times for Bitcoin, or a total split into what would effectively constitute two rival cryptocurrencies.
What is BIP 148?
BIP 148 is a user-activated soft-fork, or UASF, meaning that it’s less reliant on the support of a majority of miners. It has attracted the ‘Bitcoin Independence Day’ tag for this reason, and the 1st August launch has been the shortest timeline in Bitcoin’s history. Its purpose is to actively encourage the SegWit version upgrade that some miners have been running since late 2016, and it is thought that around 80% of Bitcoin nodes are now SegWit-ready – those miners that are ready are creating ‘bit 1’ version blocks; anything else will be rejected.
So what happens now?
In short, it’s extremely hard to tell. One possibility is that the whole network will, in due course, follow that particular chain. However, it’s equally possible that there will be two separate Bitcoin block chains with two different transaction histories, and effectively offering two entirely separate Bitcoin currencies. That could add up to one huge headache not just for the smaller miners, but for the Bitcoin holders who haven’t made sure they hold the keys to their wallet prior to 1st August in order to keep their Bitcoin safe.
Will the split happen – and if so, when and how might it settle?
Unsurprisingly, there’s quite a lot of noise on the subject at present – developers such as Greg Slepak have described the potential split as “idiotic”, especially given the identical problem affected Ethereum last year, leading to a split network and to coins being spent on both separate chains.
One strand of reassurance amongst the disquiet is the possibility of BIP 149, another UASF which demands less of miners to remain part of any upgrade to the network; in fact, it would only require miners not to build on top of any blocks considered invalid by the network.
It’s worth bearing in mind that BIP 148 may more or less pass without incident, although it would be cavalier at best to attempt any Bitcoin transactions until the middle of the month at least. Nicolas Dorier, a contributor to Bitcoin Core, is of the belief that the real risk is for those that don’t run the new software. In addition, there’s another opportunity to upgrade with BIP 149, provisionally due to happen in November, after the time-out of SegWit.
In short, hang onto your wallets, and don’t panic just yet – it’s still a case of wait and see.