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SegWit: The Countdown Progresses

July 19, 2017

Stephen Adams

The Bitcoin scaling debate is now entering a key phase. SegWit2x and BIP148 are two of the most popular scaling proposals that intend to activate Segregated Witness (“SegWit”) within a month. If this happens, the protocol upgrade could be in effect within two months.

When this happens, Bitcoin could conceivably split. If both SegWit2x and BIP148 diverge from the present Bitcoin protocol, even more splits could result.

What is Segregated Witness?

Segregated Witness, or Segwit, is a protocol upgrade originally proposed by the development team at Bitcoin Core. SegWit has also been integrated into the New York Agreement, a different form of scaling roadmap supported by several Bitcoin companies.

A user activated soft fork (UASF) titled Bitcoin Improvement Proposal 148, or BIP148, also intends to activate SegWit. The BIP148 and SegWit2x difference lies in how the activation should take place.

The Bitcoin Core development team advocated the original and first option, a BIP141-defined SegWit code that activates if 95% of hash power is reached within a single two-week difficulty period before November 15th. If the miners who broadcast that activation readiness are actually in a position to support the upgrade, there is a limited risk of a split in the Bitcoin currency and blockchain.

At present, however, only 40 to 45% of hash power is suggesting readiness for BIP141, which is why some Bitcoin users intend to use a BIP148 UASF to activate SegWit from August 1st onwards. If the majority of miners support this proposal, a split can be avoided. But if only a minority support it, a BIP148 chain could create a divide in the current protocol.

The New York Agreement, also known as SegWit2x, intends to use BIP91 to activate SegWit. This approach can also avoid a split, but the second step of SegWit2x doubles the Bitcoin base block size and is not backwards compatible, which could result in a split.

So what can we expect? Below is a list of SegWit calendar dates to keep on the radar:

BTC1 Deployment – July 14

BTC1, a fork of the Bitcoin Core codebase, will deploy. Regular users should not be affected.

BIP91 Signalling to Start – July 21

The BTC1 nodes are scheduled to be up and running. Miner signalling commences. Regular users should not be affected.

BIP91 Lock In – July 23

If the SegWit2x blueprint is followed, this is the earliest that BIP91 could lock in. Again, regular users should not be affected.

BIP91 Activation – July 25

BIP91 could now potentially go into effect. Any blocks not ready for SegWit will be rejected. Regular users should still not be affected, but miners should only mine on top of blocks that signal readiness for BIP141.

BIP91 Deadline – July 29

Bitcoin miners who want to avoid a currency and blockchain split have until today to do so. If BIP91 is not activated by July 29, a Bitcoin chain-split could result. Miners will now have only two days to decide whether they want to mine the BIP148 or legacy chain.

BIP91 Deadline – July 31

Today is the miners’ second chance to prevent a split. BIP91 must become active or BIP141 must lock in. Because there’s a minor chance that July 31st will actually be the closing day for a difficulty period, both miners and users should be prepared for a potential split.

BIP148 Activation – August 1

BIP148 activates, making August 1 the final day for miners to avoid a split.

If BIP141 or BIP91 have locked in and/or activated by the deadline, no chain-split should occur. If a majority of miners support BIP148, a split can also be avoided. But if the chain does split, two types of Bitcoin will emerge: 148 Bitcoin (“148BTC”) and Legacy Bitcoin (or “LegacyBTC”). Miners will have to decide which chain they will mine.

Potential Bitcoin ABC Launch – August 4

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