Estimated reading time: 1 minute, 55 seconds
Ask an Expert is our series, where our blockchain expert, Taylor, explains major blockchain concepts and discusses issues within the blockchain field currently. In this episode of Ask an Expert, Taylor addresses the current Bitcoin controversy taking place this August 1, 2017. He will cover the significance, how it will affect bitcoin holders, different possible outcomes and how users can protect themselves. See below for the the summarized questions and answers of this video!
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What is the significance of August 1st 2017 in the Bitcoin community?
It’s a climax of The Scaling Debate.
Essentially, the bitcoin system has seen a recent increase in activity for the last year and there’s been a huge increase in transactions.
How Does this affect the bitcoin holder?
There is a possibility for a chain split. The split may last hours, days, or longer (there is also a chance there could be multiple bitcoin chains; this is called a FORK).
It’s a divergence of code base on incompatible ideas. This happens all the time on open source projects. Because blockchains are consensus systems, we have to reconcile these divergence of ideas.
What is the split in the ideology?
Right now there are multiple ways to scale the bitcoin blockchain. One group wants to increase the block size from 1MB-2MB. Another group wants to upgrade the internal structure to be efficient and/or more flexible for the future. Importantly, this contains a fix to a long standing bug in bitcoin call transaction malibilty.
Are those options mutually exclusive?
No. In fact, the most recent proposal includes both upgrade to the block size in addition to adoption of Segwit. What is mutually exclusive, are the approaches to changing the software either by Soft Fork or Hard Fork, which have varying levels of backwards compatibility.
If Bitcoin splits, what can I do to protect myself?
Some exchanges are halting deposit and withdrawals, it would be wise to be cautious of transactions immediately after the event. As always, for the most control, hold the coins in YOUR wallet.