The scaling debate has been the source of contention for a while in Bitcoin circles. I have been following the SegWit vs SegWit 2x debate for a while, though I might be a little late in giving my thoughts. However I thought I would give my opinion based on my understanding of the issues at hand. I live in South Africa and I have been investing in Bitcoin since 2015. I am also in the process of setting up a Bitcoin business. I am neither a programmer nor a developer. So,my opinions will be based on my user experience and not the technical aspects of the debate as I am not qualified to critique that side of the debate. Ever since finding out about Bitcoin, I have been obsessed about it. As a libertarian, I liked the idea of digital cash that is quick, has low charges and cuts out the middleman (banks). South African banks have one of the largest transaction fees in the world. I wanted an alternative currency, and I saw Bitcoin as an alternative means of exchange to the Rand that the government or banks will not meddle in.   

The problem: Bitcoin is currently experiencing massive scaling problems, which are only getting worse with time. The major cause of the great debate is that there seems to be no agreement on how scale the Bitcoin network. This debate has been brought about because many more people are coming into the cryptocurrency space. With Bitcoin being the most popular cryptocurrency, the 1MB limit in the code is now not enough to handle the amount of transactions. This has caused slow transaction confirmations and high transactions fees.  

The Solutions:  Bitcoin Core: Bitcoin core is a team of around 100 developers. Their proposed solution is a soft fork, which essentially means there will be an added rule in the code without changing the current rules. So if anyone has not upgraded, they will still be able to work on the network. They will just not be able to take advantage of the advantages brought about by the upgrade. The solution proposed by Bitcoin Core is to add Segregated Witness (SegWit) which will fix transaction malleability* and provide a possibility of implementation of the lighting network*. This fix will  also enable an immediate increase of the block size limit to four megabytes. However it is important to note, that this is a short term fix as if the growth in the number of people coming to Bitcoin as fast as it has been. Within the next year or 2 we will be sitting with the same problem. It is also important to note that while we wait for the possible lighting network implementation, the transaction fees can go even higher that they currently are. In some circles they fees are estimated to grow as high as $100 for a $2000 transaction. The speed of conformation of transactions will also decrease as the blocks fill up again. In the end, SegWit will only sort out alot of problems, except for the scalability.  From what I have read it appears the Bitcoin Core team’s proposed solutions is that they are prioritizing preserving Bitcoin’s storage of value while sacrificing its utility as a means of exchange.   

Bitcoin Unlimited: Bitcoin Unlimited is a small team of developers and mostly miners. Their proposed solution is a hardfork, which means there will be a change in rules governing Bitcoin. Because of the way the code is written, everyone needs to agree on the rules. If they don’t, this will cause a split in the chain causing the opposing chain to separate. Segwit2X is a combination of both SegWit and a 2MB hardfork (which will be activated three months after Segwit). The main criticism against 2X is that the code is inferior. I have posted a link below of an article by Luke Dashjr and Eric Lombrozo where they presents their thoughts on Segwit 2X code. Bitcoin Unlimited want to prioritize the implementation of solutions to scalability problems. Segwit 2X would fix these problems immediately.     

Other Issues and Politics:  

The New York Agreement:   An agreement between the various stakeholders was signed agreeing with the Segwit2X proposal.  That agreement stated: We agree to immediately support the following parallel upgrades to the bitcoin protocol, which will be deployed simultaneously and based on the original Segwit2MB proposal:   

• Activate      a 2MB hard fork within six months

I have not heard any compelling reasons as to why Bitcoin Core is backing down on this agreement. I find this troubling and disingenuous to sign an agreement that you know will not fulfill.  

Power: We need not forget that this is a $50 to $60 billion industry. I do think power has a lot to do with the debate. As far as I can see things, I think Miners have the most power as they are the ones that secure the network by the proof of work they submit. This by no means says developers and other stakeholders should not have a voice. We need to find mechanisms whereby there is no one side that has absolute power.  

Censorship: There has been accusations of censorship by Core in forums like Reddit.  I must say while doing research about this topic, it was rather hard to find articles in support of SegWit 2X. That made me wonder why that is if there is an 87% support by mining pools for SegWit 2X.  

Conclusion: I would like to suggest anyone who has not read Satoshi’s Bitcoin white paper to read it. And those who have read it, to go re-read it. Whenever the decisions are being made, we need not forget the fundamentals ideas presented on that white paper. The paper is titled, “Bitcoin: A Peer-to-Peer Electronic Cash System”. To me this is a clear indication that Bitcoin is meant to means of exchange.  I often hear people say, who wants to buy coffee with their Bitcoin? Guess what, I do. As well as many others like me in developing countries and 3rd world countries. It might be literary Starbucks coffee but I want to be able to send $100 to my family  in the rural Transkie to buy groceries without having to spend a large portion of that paying for transactions fees. I am sure people in who use Bitcoin in Zimbabwe or Venezuela or any other poor country want a cheap and fast method of cash. We need to be careful and not make Bitcoin an elitist coin that only those who got in first are the only ones that can afford to use Bitcoin because the transaction fees are too high. My stance is one that is not popular. I make my decisions based on principle. I hope we will not allow greed to cloud our judgement. I dont think either side is being malicious, I think both sides thinks they are doing what is best for bitcoin. It is my belief that the reason Bitcoin has lasted so long is because it had low transaction fees, making transactions was fast and confirmations were quick.  I hope this issue resolves itself with us users paying a high price. In the meantime, all my holdings are locked in a paper and hard wallet. I hope for your security, you all have done the same.   

                        BITCOIN IS THE FUTURE!!

*Transaction malleability – an attack that lets a person change a Bitcoin transaction’s unique ID before conformation on the Bitcoin network  

*Lightning network – hashed timelock contracts with bi-directional payment channels that will allow payments to be securely routed across multiple peer to peer payment channels.  

Interesting Articles and videos: 

Luke Dashjr –  https://medium.com/@lukedashjr/the-segwit-2x-beta-review-and-thoughts-ca480694a8c7 

Dr Peter Rizun – https://www.youtube.com/watch?v=VoFb3mcxluY

Roger Ver –  https://www.youtube.com/watch?v=VUegfo-8HKc

Eric Lombrozo – https://medium.com/@elombrozo/why-segwit2x-or-why-not-3b2a3917a2be  

Jimmy Song – https://medium.com/@jimmysong/segwit2x-what-you-need-to-know-about-the-2mb-hard-fork-27749e1544ce   

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