After months of disagreement and internal debate, the Bitcoin Network will finally implement a scaling solution; BIP91 has just locked in, meaning that the activation of SegWit will be imminent.
BIP91 Locks In
The lock in of the BIP91 proposal means that as long as 51% of the network hash power continues to mine blocks that support SegWit, the protocol will activate and there will be no risk of a major chain split.
BIP91 is a method of activating SegWit on the network as a result of what is known as the ‘New York Agreement’, which is very similar to the original BIP141 deployment method but with a few key differences:
- The activation period is now 336 blocks, instead of the original 2016.
- The activation threshold has been reduced to 80%, as opposed to the original 95%, which was deemed too high and impossible to achieve.
After this successful BIP91 lock in, miners signaling for BIP91 and running the BTC1 software developed by Jeff Garzik will start to reject all of the blocks which are not signaling for SegWit, which is very similar to the UASF (BIP148) concept. This should result in a successful SegWit activation since miners that aren’t signaling will effectively have their blocks constantly orphaned, leading to a significant loss in their mining revenue.
Community Applauds Long-Awaited Solution
Some members of the Bitcoin community expressed their gratitude for a compromise and end of the internal fighting:
SegWit2x changed the environment, finally. 95+% miner support. SegWit is happening.
— Erik Voorhees (@ErikVoorhees) July 20, 2017
While others noted the correlation between SegWit activation and the bitcoin price:
It's not a coincidence that the Bitcoin exchange rate rallies when people cooperate.
— Jameson Lopp (@lopp) July 20, 2017
Prediction: When BIP91 locks in and pools signal SegWit, BTC price will rally hard. Just like for Litecoin, market knows SegWit is awesome.
— Charlie Lee (@SatoshiLite) July 20, 2017
Bitcoin Soars Amidst Renewed Market Optimism
The fact that SegWit will finally activate may just be what Bitcoin needs to reach mass adoption and become a global currency; with SegWit, technologies such as the Lightning Network can finally be deployed. This will massively scale the number of transactions that bitcoin can handle. Users will be able to make micropayments again without worrying about exorbitant fees, which should lead to wider acceptance in physical stores.
The fulfillment of the first part of the New York Agreement also dissipates the fear of the possibility that Bitcoin might split into two major chains; practically the entire network has agreed to a plan and stuck to it. While some parties may be unhappy about the second part of the agreement (which is a 2MB fork), investors are relieved to hear that consensus can be reached and that problems can be discussed to find a solution that most are happy with.
Both of these factors caused the price of bitcoin to jump over $500 today, reaching a high of $2922 at the time of writing. This is the largest price increase that bitcoin has experienced in one day, with both Asian and Western exchanges seeing record trading volumes.
While some investors have set very high expectations for bitcoin, with targets at $50,000 or even as high as $500,000, breaking through the $3000 mark wouldn’t be that far off now, would it?
What do you think? Would you say that $3000 is a realistic target, now that SegWit is bound to activate? Do you think that this activation is beneficial for the network? Let us know your thoughts below!
Images courtesy of Pixabay, Giphy