A ‘Segwit2x Working Group’ Has Submitted a Bitcoin Scaling Plan

Just recently Bitcoin.com reported on a Bitcoin Improvement Proposal (BIP) written by Calvin Rechner that was recently submitted to the developer’s mailing list. There is another plan in the works initiated by Bitcoin developer and Bloq CEO, Jeff Garzik, that aims to combine Segwit and a 2MB block size increase. On May 30 Garzik addressed the community detailing his thoughts on bitcoin’s current throughput issues and the proposed scaling solutions’ intentions.

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A Possible Scaling Solution to an ‘Entirely Predictable and Avoidable Outcome’

A 'Segwit2x Working Group' Has Submitted a Bitcoin Scaling Plan
Bitcoin developer, Jeff Garzik.

The bitcoin scaling discussion has been an ongoing ferocious debate that has lasted for years. Now there are multiple conversations taking place discussing different ways to scale like using alternative implementations of bitcoin’s code, a user-activated soft fork, extension blocks, emergent consensus, and just recently Barry Silbert’s idea. The suggestion announced by Silbert’s company the Digital Currency Group (DCG) is an agreement based off of RSK’s chief scientist, Sergio Demian Lerner’s Segwit-2MB proposal. Furthermore, Silbert claims to have backing from 56 companies and over 84 percent of hashrate support.

Garzik has been working on a solution called “Consensus SegWit2x signaling on bit 4” which is available for viewing on Github. At the moment the pull request has quite a few developers discussing the idea and reviewing the code. There are also quite a few programmers that disagree with the concept in its entirety, or parts of the proposal, while there are others who are supportive of the compromise idea. On May 30 Garzik addressed the bitcoin ‘community’ in a personal blog post called “A personal note to the Bitcoin community.”

“An entirely predictable and avoidable outcome — skyrocketing fees and network at max capacity — has come to pass, with the predicted results,” explains Garzik.

Base block size was not increased, despite having years to plan the upgrade, years to avoid the preventable consequences of high fees driving away use cases and users away from Bitcoin. Failure to increase a temporary DoS limit — base block size limit — has direct, measurable, negative economic consequences.

Measurable Data and Outcomes Trump Conspiracies

The developer also says it doesn’t matter who played a particular role but “upgrading base block size did not occur.” Moreover, Garzik details that measurable data has, and always will cut through “silly conspiracy theories.” According to his post, the community should rely more heavily on the outcome of efforts rather than these theories.

The Segwit2x Working Group has a specific charter, with a specific, openly stated goal: Segwit + 2M base block size increase — The community should judge these efforts based on outcome

Garzik concludes by saying he hopes the community can judge by viewing “those who act, and produce measurable outcomes.” He believes doing so is far superior to resorting to personal attacks and spreading conspiracies. “I ask everyone who wants a better, brighter, more positive Bitcoin community to start here: Be Good To Each Other and let’s build good code,” Garzik adds.

An Opportunity to Provide Feedback and Help Improve

The blog post was submitted to multiple bitcoin forums and some of them submitted by Garzik himself. Of course, a few people disliked the idea, while others supported the concept of moving scaling along and bolstering a compromise. One bitcoin developer who has been a staunch supporter of the user activated solution, Eric Lombrozo, detailed his opinion on the proposal stating, “It’s beyond repair. I will continue to support BIP148 (UASF).” However, the DCG founder Barry Silbert immediately disagreed with Lombrozo’s statements.

“Beyond repair?” Sibert says, responding to Lombrozo.

They literally just put it up on GitHub to give everybody the opportunity to provide feedback and help improve

It’s still hard to tell what the “outcome” of the scaling debate will be and if the community will back the Segwit-2MB proposal idea. Nevertheless, it looks as though bitcoin proponents are trying to figure it out more so than ever before.

What do you think about the Segwit2x Working Group proposal? Let us know your thoughts in the comments below.

India’s Government Divided Over Bitcoin Legalization

As the period for public comments regarding the regulatory framework for bitcoin comes to an end, a debate heats up among members of the Indian Parliament about the legalization of digital currencies. Meanwhile, bitcoin trading volumes remain strong in the country.

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Parliament Members Divided Over Bitcoin

India's Government Divided Over Bitcoin LegalizationAt a Parliamentary Standing Committee of Finance meeting last week, a heated discussion erupted among members of the Indian Parliament about bitcoin.

A number of Parliament members, including BJP member Kirit Somaiya, “cautioned the finance ministry officials present at the meeting against any move to legalise bitcoin,” according to The Economics Times, India’s leading business newspaper.

A source told the publication:

Members feared that it [bitcoin] could become a parallel instrument for cycling black money and dodgy transactions and also be a source of terror financing.

India's Government Divided Over Bitcoin Legalization
Kirit Somaiya

They wanted the government to look into the vulnerability of bitcoin. Somaiya who has repeatedly spoken against the digital currency, calling it “illegal” on numerous occasions, raised a series of questions.

He asked the officials why the government was being ambivalent about this instrument, citing that they have not clarified whether it was a legally permissible instrument or not.

He also demanded to know whether officials are properly briefing the prime minister about the risks of bitcoin.

Bitcoin Could Soon Be Regulated in India

Currently, the same government has been considering legalizing the digital currency. Last week, the Finance Ministry started soliciting comments from the public on how to best regulate bitcoin. The deadline for submissions is May 31, and 3,357 comments have been submitted at press time. The majority of them are in support of regulating bitcoin.

India's Government Divided Over Bitcoin Legalization“Regulating bitcoins will address many such concerns and queries, including market acceptance, customer trust, investment security, money laundering, hawala, etc,” Hesham Rehman, co-founder and CEO of Bitxoxo Bitcoins Online, was quoted by The Times Group as saying. “For instance, regulations like strong eKYC and penalizing bitcoin trading in cash will help proper transaction records which will negate all the chances of any sort of illegal activity.”

Karthik Iyer, India’s Ambassador of the blockchain think tank P2P Foundations, also offered his viewpoint on the situation:

The government should think about treating cryptocurrencies as a commodity if not a full-fledged currency with exchange value. There is a lot of arbitrage in the markets and it can generate a great deal of wealth for India’s crypto traders.

India’s Bitcoin Volume

India's Government Divided Over Bitcoin LegalizationMeanwhile, bitcoin trading volumes in India have exploded. Last week, the price of a bitcoin skyrocketed globally. During that spike, it traded at nearly a $1,000 premium in India as supplies to the country have been limited.

This month, leading Indian bitcoin broker Zebpay announced that it had reached a milestone of over 500,000 app downloads and is adding more than 2,500 users daily. Struggling to keep up with the surge in new users and volume, Zebpay announced, “we have put a temporary buy limit of Rs 50,000 per day due to the shortage of bitcoin stock.”

India's Government Divided Over Bitcoin LegalizationNew user growth was also the cause of the downtime experienced at leading Indian bitcoin exchange by volume, Coinsecure. “We have been experiencing exponential growth of users on our website, causing slowness and stress on our systems,” according to a statement from CEO Mohit Kalra to Coinsecure’s customers.

Meanwhile, on the peer to peer Localbitcoins exchange, trading volumes in Indian rupee hit record highs as well, with nearly double the previous week’s volume of rupees traded for bitcoin.

India's Government Divided Over Bitcoin Legalization

Do you think that the Indian government will listen to their people and regulate bitcoin? Let us know in the comments section below.

Markets Update: Cryptocurrency Prices Rebound After Last Week’s Dip

The price of bitcoin seems to have found some stability over the past 24 hours, after last week’s sharp upward climb in value followed by a 30 percent dip the next day. Since the drop, the price has bounced back and is hovering around US$2250-2300 per BTC at the time of writing.

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Bullish Pressure Returns to Bitcoin Markets After a 30 Percent Dip

Last week was an exciting time for cryptocurrency traders as quite a few digital assets hit all-time price highs on May 24. Bitcoin’s value reached a high of $2760 across global exchanges which was followed by a short-term downtrend to the sub-$2000 mark. Quite a few traders had assumed a significant dip to the $1800-1600 range would take place, but so far these predictions never materialized. Since bitcoin ricocheted from its low, it has since consolidated between $2200-2300 over the past three days. For now, there is a touch of bullish pressure keeping the price going, but it’s significantly weaker than last week.

Markets Update: Cryptocurrency Prices Rebound After Last Week's Dip

Technical Indicators

Technical indicators still suggest a bear market could continue and what we see now may be an extended ‘dead cat bounce.’ Over the past couple months, we’ve reported that the 100 Simple Moving Average (SMA) was above the longer term 200 SMA in nearly every price analysis. However, things have changed as the 100 SMA is now below the 200 SMA indicating the downtrend may not be over.

Markets Update: Cryptocurrency Prices Rebound After Last Week's Dip
Bitstamp market depth 5-30-17, 10:30 am EST.

Moreover, the Relative Strength Index (RSI) and Stochastic oscillators still show the price is overbought and bears may take the upper hand in the near future. Bitcoin’s price rebound was unexpected and has shifted traders predictions slightly, but a good majority are still assuming the uptick is merely a bull trap. If an upside breakout breaks the $2400 range, there’s a good chance we could skip the downturn and head towards all-time highs once again.

A Glimpse at Altcoin Markets

Alternative cryptocurrency markets have all seemingly followed bitcoins ups and downs over the past week. One notable altcoin that has been performing quite well is Ethereum (ETH), which is $205 per ETH at press time. On May 30th Ethereum trade volume surpassed BTC markets for the first time in history and currently commands a $19 billion market cap. The third highest market cap held by Ripple (XRP) has taken a significant dive and hasn’t really recovered much as the price hovers around $0.23 cents per XRP.

Markets Update: Cryptocurrency Prices Rebound After Last Week's Dip
Ethereum trade volume surpassed BTC volume for the first time in history.

The fourth highest valued alternative cryptocurrency market NEM retraced a touch and is resting at $0.21 cents per token. Other altcoins have also rebounded since the dip including Ethereum Classic (ETC $17), Litecoin (LTC $25), Dash ($119), Monero (XMR $43), Bytecoin (BCN $0.002) and Stratis (STRAT $4.50). Another coin that has received a bunch of volume is Tether, which currently holds the fifth highest volume as some traders seem to have used the token as a safe haven from the dips.

The Verdict

For now, Bitcoin’s price has appeared to have found a temporary floor and remains relatively stable with a few light swings here and there. Some traders seem pretty confident that a horrible bear market has been avoided, but most traders are still doubtful the downtrend is over. Good news from Russia has seemingly helped push the value of bitcoin upwards. Meanwhile, talks of a scaling compromise has replaced some of the vitriolic energy that has given the bitcoin ‘community’ a bitter taste.

Bear Scenario: It’s possible a second leg downwards could happen in the near future continuing to push the price to lower levels. Bitcoin’s fiat value could dip down to the $1800-1600 range if bulls step away from exhaustion. At the moment looking at order books from popular exchanges shows a strong floor at the $2000 mark for the time being.

Bull Scenario: Bitcoin’s price has jumped back and has shown resilience after last week’s losses. In order to bring the upswing velocity further, it would help if the cryptocurrency crossed over the $2400 range. Breaking this resistance point could bring the digital asset to higher levels and possibly get closer to last week’s top or create a new all-time high.

What do you think about the price of bitcoin retracing to $2250-2300? Do you think bitcoin will continue to rise to higher levels? Or do you expect bears to lower the price further shortly? Let us know in the comments below.

Disclaimer: Bitcoin price articles and markets updates are intended for informational purposes only and should not to be considered as trading advice. Neither Bitcoin.com nor the author is responsible for any losses or gains, as the ultimate decision to conduct a trade is made by the reader. Always remember that only those in possession of the private keys are in control of the “money.”

A New Bitcoin Improvement Proposal Aims to Compromise

As the price of bitcoin settles down many bitcoiners are now concentrating on the scaling compromise proposed at the Consensus event held last week. Now a few bitcoin developers have decided to work on Segwit-2MB proposals that try to adhere to each side of the debate.

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The Compatibility-Oriented Omnibus Proposal

A New Bitcoin Improvement Proposal Aims to Compromise It is still hard to envision that everyone in the bitcoin community will be pleased with a compromise. There are still some bitcoin proponents who vehemently oppose Segwit, and then there are those who fully disagree with a 2MB hardfork. On May 29 a developer named Calvin Rechner submitted a new bitcoin improvement proposal (BIP) that aims to cohere to the recent Barry Silbert scaling concept.

“This proposal is written under the assumption that the signatories to the Consensus 2017 Scaling Agreement are genuinely committed to the terms of the agreement, and intend to enact the updates described therein,” Rechner’s BIP details.

This document describes a virtuous combination of James Hilliard’s ‘Reduced signalling threshold activation of existing segwit deployment’, Shaolin Fry’s ‘Mandatory activation of segwit deployment’, Sergio Demian Lerner’s ‘Segwit2Mb’ proposal, Luke Jr’s ‘Post-segwit 2 MB block size hardfork’, and hard fork safety mechanisms from Johnson Lau’s ‘Spoonnet’ into a single omnibus proposal and patchset.

UASF and a 2MB Hard Fork Deployment in Six Months

Rechner explains that Shaolin Fry’s UASF is included so the existing Segwit deployment can be activated without creating a new release. Following the UASF implementation, the BIP explains that a 2MB hard fork deployment will occur six months after Segwit activation.

“The intent of this proposal is to maintain full legacy consensus compatibility for users up until the hard fork block height, after which backwards compatibility is waived as enforcement of the hard fork consensus ruleset begins,” details Rechner.

‘A Possible Win if the Community Will Accept It’

Following Rechner’s BIP submission, bitcoiners on social media and forums discussed the recent proposal. Throughout the conversations concerning the new BIP, a good portion of people seemed to like the idea. Some explained the reason they supported this proposal is because it includes UASF and the block size increase has safety nets in place to avoid divergent consensus.

“The Spoonnet-based improvements need clarification IMO, but otherwise it looks like a possible win if the community will accept it,” explains bitcoin developer Luke Jr. “Provided there is reasonable consensus from the community, a soft-hardfork (aka MMHF aka Spoonnet) can be theoretically made pretty safe. But I’m not sure it can really be ready within six months.”

Even though there still seems to be a lot of people hell bent towards not compromising at all, there are definitely signs of people looking to find the right compromise. It’s not certain this new BIP will be taken further, but it shows the growing trend to find consensus is important to most people from both sides of the debate.

What do you think about Calvin Rechner’s new proposal? Do you think the bitcoin community can find a compromise? Let us know what you think in the comments below.