State of the Blockchain: Bitcoin Cash rises after Segwit2x failure

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This is State of the Blockchain, where we focus on the most noteworthy news you need to know in the blockchain scene over the past week. Without further ado, here’s our hit list for the week.

Segwit2x is suspended

The long-awaited and controversial protocol upgrade for bitcoin has been suspended. The announcement was made through an email on November 8 by Mike Belshe, the CEO of BitGo and one of the leaders behind the Segwit2x project.

Belshe is a strong proponent of increasing the block size of the bitcoin blockchain, but according to the email, he believed that the unity of the bitcoin community was more important.

“Although we strongly believe in the need for a larger block size, there is something we believe is even more important: keeping the community together. Unfortunately, it is clear that we have not built sufficient consensus for a clean block size upgrade at this time. Continuing on the current path could divide the community and be a setback to bitcoin’s growth. This was never the goal of Segwit2x.”

Why does this matter?

The purpose of implementing Segwit2x is clear: There is an urgent need to increase the scalability of the bitcoin network. Bitcoin’s 1MB block size allows for just 250,000 daily transactions. This leads to extremely slow transaction time and high transaction fees, thus making the current bitcoin blockchain too inefficient for mainstream adoption. As more users invest into bitcoin and contribute to the bottleneck, bitcoin is becoming more and more like digital gold⏤a great store of value but a poor medium of exchange.

Many developers and bitcoin supporters have claimed that this hard fork was too risky and could put the legacy bitcoin blockchain at risk. However, the news of the suspension of Segwit2x is met with relief from opponents, especially those who have joined the NO2X movement on social media.

Litecoin founder Charlie Lee, one of the most prominent voices in the NO2X movement, responded immediately on Twitter:

Segwit2x hardfork has been called off! Common sense prevails. Let’s now work together towards scaling safely. We may need something like a 2x hardfork in the future, but let’s do it when there’s consensus and not rushed. 🚀

(Removing my NO2X tag now.) 😀 https://t.co/FuaUy2Kzex

— Charlie Lee (@SatoshiLite) November 8, 2017

Bitcoin Cash hits all-time high