In the wake of Segwit2X, what’s in store for bitcoin?

in bitcoin •  last year

The recent forks have happened in bitcoin because it’s reached a turning point in its evolution toward mass adoption. The 1 MB block was not foreseen as necessarily permanent according to Satoshi Nakamoto. Block size increases were not seen as a real problem. However, centralization is an issue that should be avoided at all costs, lest bitcoin turns into nothing more than a bank. And that isn’t revolutionary at all.

This is because the swift trade off for achieving scale is adoption of a trust model. We already have that in banks. If you want to avoid economic exclusion and the problems of trust, the slow and difficult path is better.

There are exciting developments in off chain solutions such as Lightning Network that will make a difference not only in scaling but in privacy. In the mean time, I expect market cap to spread out among several of the top altcoins because bitcoin is going to take a while to scale. It will be the best SOV, but not necessarily the best medium of exchange for the next year or so.

At this point the altcoin market doesn’t have congestion problems, but that’s because their user base is far more limited at a tiny fraction of what bitcoin has experienced recently. BCH which forked off in August is the closest now in terms of achieving scale, but at 8 MB, that’s not nearly big enough in the long term to achieve Visa / MC transaction speeds (1 GB or more is necessary).

Assuming BCH grows at the same rate as bitcoin has this past year, it will reach an impasse by summer 2018 where it has the same issues that bitcoin had this past summer and there will again be scaling issues. Andreas Antonopoulos said that block size increases “are not the best solution”.

The bitcoin core team still is the largest and most experienced with most other altcoins having a single developer. Open collaboration is the most resilient method of bug swatting in software.

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