Is It Over? - Bitcoin Changes over the Last Month
Bitcoin, mainly its software, has seen a lot of changes over the last month. Late July we saw a major long-term exchange (for altcoins as well) shutdown, we saw a fork (chain split) at the beginning of the month, segwit for bitcoin locked in and finally SegWit now activated.
Normally a bitcoin exchange going down is a huge event placed in the "bear" category for bitcoin. But for this instance the price kept on chugging along it's bullish trajectory.
Going from ~$2,600 to over $4,000 in less than a month.
The site and supposed owner arrested were linked to the Mt Gox stolen funds.
The next day BTC-e was fined $110 by the US Government and
An update released August 14 claims to state that BTCe has 55% of user funds but a return to customers seems highly unlikely with the domain and probably the servers not under their control; just how would they do user verification and maintain a website with the tyrannical US government breathing down their neck?
Back in 2014, BTCe had a whole quarter of the market volume for bitcoin trading:
BTC-E when it was seized has been the oldest exchange left standing in the market for bitcoin and altcoins. It's known for its privacy oriented accounts with no ID verification.
Though we don't know exactly where the funds the site had, if they're intact or confiscated or hacked, if some are lost the site, according to btcmanager.com would like to use the Bitfinex model of issuing tokens and paying back users through future profits, but this is not viable. It's not possible because the domain is seized, it has not reopened, and more impactfully the US Government, specifically the Financial Crimes Enforcement Network (FinCEN) has fined the BTC-E team $110 Million.
Bitcoin Cash - Chain Split Fork of Bitcoin
Originally labelled Bitcoin ABC, the now successful fork into bitcoin with 8MB blocksize limit first was proposed by developer Amaury Séchet and supported vehemently by mining pool ViaBTC and later by Roger Ver and Bitcoin.com.
The trading of Bitcoin Cash, as with any new coin, was very volatile in the first month, going anywhere down to $200 and up to $900.
To claim your Bitcoin Cash you need to have control of your private keys from the original bitcoin network and you can use, for example, Electron wallet a software based on the Electrum wallet. I have not done this yet so don't jump right into it without doing your own due dilligence. I would assume this means the more bitcoin on the regular network you spend then you lose access to your potential bitcoin cash attached to those bitcoins that were not yet split out into bitcoin cash.
Bitcoin cash was announced on July 22.
Bitcoin Cash hard forked off of bitcoin on August 1st.
The bitcoin blocksize limit did not actually start at 1MB where everyone remembers the limit being today. It was set at a limit to reduce spam and regularly increased according to Satoshi's wishes back in the early days but somehow was stuck at 1MB for many years until the blocks completely filled up early this year.
SegWit locks in and Activates on Main Bitcoin Chain
With SegWit now active, the old blocksize limit as we know it is no longer applicable. The situation is much more complicated. Instead of "Block Size Limit" it is a "Block Weight Limit" as Bitcoin Magazine explains:
Bitcoin blocks now have a weight limit instead of a size limit. Depending on the types of transactions included, this means that blocks can get up to 4 megabytes big — though some 2 megabytes is a more realistic maximum. This should decrease network fees for users, and speed up transaction confirmation times.
However, this doesn’t mean that all blocks will immediately bump to 2 megabytes in size today. For a transaction to utilize the added space, it must be sent from a SegWit address (or more accurately, a Segwit “output”) — not just to a SegWit address.
So, with SegWit a roughly doubling of the blocksize and a possible 2MB increase coming in months (see below) the full potential of the bitcoin development changes this year could equate to about ~4MB blocks, though like I said, the blocksize is not the same as it used to be. This upgrade to the software also paves the way for the Lightning Network which itself is highly controversial.
On July 21, BIP91 locked in which reduced the threshold for SegWit activation to only 80%.
August 9: Segregated Witness locked in.
August 24: Segregated Witness is finally activated on the main bitcoin legacy network.
The Chinese miners and perhaps users were more apt to call for increased block size over a solution like SegWit. Bitcoin Unlimited was the original proposal for increased blocksizes and strongly supported by Roger Ver & Bitcoin.com. There was a whole stink about reddit.com/r/bitcoin censorship of any discussion on larger blocks vs segwit. The censorship I've heard 'justified' by saying that the subreddit is for discussion of bitcoin's main chain and not any kind of forks or splits or potential changes the community (majority?) doesn't agree with. Though that kind of makes sense, denying discussion of improvements to bitcoin on the largest open forum for discussion does feel like silencing opinions. If you go over and use r/bitcoin_uncensored your post will simply not get as many eyeballs.
Is it Over? No - There's More!
The changes to Bitcoin this year are not over. Coming up toward the end of November is the SegWit2x potential implementation or split. This is the 2MB fork portion of SegWit2x agreement that was put forth to appease the large blockers by accepting segwit instead of a larger blocksize increase, which has already been superseded by the Bitcoin Cash split with it's 8MB fork. For that reason I see the 2MB blocksize increase in the main bitcoin chain to not be likely at all. (Thanks @lexiconical)
To track it yourself, it was announced that the 2MB upgrade would happen at block 494,784.
Not only this, but the Lightning network now needs to be developed after it's prerequisite (SegWit) is finally active. And bitcoin service providers are not even yet ready to accept SegWit.
In Conclusion, stay vigilant it is a big year for bitcoin software changes to say the least.
Look for a further update on what bitcoin wallet to use for segwit, bitcoin cash etc., as I have to learn for myself so why not share with you guys what I will be learning, eh?
Why I Was Wrong About Segwit And Big Blocks- Jimmy Song 2017-08-24 -
Good Summary on our State & Changes This Year
Countdown to SegWit: These Are the Dates to (Still) Keep an Eye On - UPDATED
The Bitcoin Block Size Debate Has Been Going On Since 2013 - 2015-08-20
What is the Bitcoin Block Size Debate and Why Does it Matter? - 2015-08-21 (CoinDesk.com)
Segregated Witness Activates on Bitcoin: This is What to Expect - 2017-08-23
Roger Ver Debates Tone Vays on SegWit vs Blocksize Increase - 2017-02-26
2017-08-24 2:45PM: Updated Thumbnail so text is visible
2017-08-24 3PM: Added recaps for SegWit & Bitcoin Cash
2017-08-24 3:15PM: Added the blocksize history and READ MORE links