Bitcoin’s Battle Over Segwit2x Has Begun

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22 August 2017

“Download BTC1.” That’s all it took.

Part of a statement in a larger BitPay blog post last week, the words were meant to urge the bitcoin processor’s users to upgrade their software ahead of a scheduled code upgrade. It’s safe to say, however, that they didn’t have the intended effect, setting off a firestorm of angry commentary.

That’s because BitPay was indicating support for “BTC1,” an alternative software client to Bitcoin Core, the one used by over two-thirds of the network. But the blog post didn’t describe the possible consequences of downloading the software. In bitcoin, incompatibility can have economic consequences – namely, the creation of two bitcoin assets, a development that’s still splitting sentiment.

Among the angry voices were notable figures in the blockchain tech community.

Lightning Network creator Tadge Dryja called it “straight up malware,” while Bitcoin Core contributor John Newbery asserted that the post was “dishonest and dangerous.”

The accusation is that the advice was put out willfully by BitPay to confuse users – akin to asking users to say, upgrade their iPhone in a way that would make it so they could no longer message other users, or accidentally sign them up for a new carrier. 

As such, the criticisms perhaps had more to say about the state of bitcoin’s technical roadmap and the lingering idealogical battles ongoing among the network’s many different participants.

More broadly, the BTC1 software has emerged as one of the more controversial proposals as it’s based on an agreement made up of a group of miners, companies and developers, who, claiming that they represent the interests of network users, intend to hard fork bitcoin to increase the network’s block size in November.

And though Segwit2x isn’t scheduled to release the hard fork code for several months, the idea is that doing so could potentially lead to the creation of another bitcoin network, one that would compete with bitcoin and bitcoin cash. 

That possibility, it seems, has ripped open old wounds.

Culture of infighting

On social media, no slight is too small if it sends a message.

In another notable incident, a developer for Bitcoin Core went so far as to delist Jeff Garzik, the lead developer for BTC1, from the Bitcoin Core GitHub shortly after the BitPay incident.

Although, that this came to pass perhaps isn’t surprising. For one, Garzik hasn’t contributed to bitcoin since 2014. But the incident does carry a larger symbolism, in that some have labelled Garzik a villain in the ongoing technical battles.

If one of the key charges levied at Segwit2x is that the group, composed of a group of influential bitcoin companies, is trying to “corporatize” bitcoin development, it’s Garzik that has taken most of the heat.

Critics have so far sought to label Garzik a “politician” or else ask (sometimes not politely) that he leave the bitcoin development community entirely. (Garzik was a former employee of BitPay and is now CEO of a startup called Bloq).

Still, Garzik has his defenders, particularly among Segwit2x supporters. Erik Voorhees, whose firm ShapeShift is a signatory, sees the criticisms as reinforcing the idea bitcoin’s development team isn’t open to change.

Users were keen to disagree – and colorfully.

Danger, danger

Yet another touchpoint in the battle has been the idea of security, with each side spending ample time accusing the other of the willingness to put user money at risk for their ideological beliefs.

Chief among these is the budding fight over “replay protection.”

The idea is that if Segwit2x chooses to go through with an attempt to hard fork the block size to 2MB, and the blockchain splits in two, replay attacks could lead some users and companies to lose money. And in the mind of advocates for Bitcoin Core, those backing the new agreement should be the ones to add replay protection.

In this way, the event mirrors developments last summer, when a group of developers began working on ethereum classic, the original blockchain abandoned by a majority of users following a hard fork that proved contentious in its community.

And the concerns have merit, as some users lost funds in the resulting shuffle.

Some developers, who have proved willing to work with the Segwit2x group, have even raised concerns as the BTC1 software has not had replay protection put in place. The charge here is, that’s been done purposefully.

First and foremost, by not adding replay protection, the Segwit2x group could avoid the appearance of an impending bitcoin split and encourage more users to adopt its software – and that’s in line with statements from its members, who have argued BTC1 won’t result in the creation of another bitcoin.

Outspoken supporters of a larger block size aren’t being shy that they believe this is the right tactic, predicting Core will be the less-popular chain in the end.

Peace and understanding

Yet, there have been attempts to spur more well-meaning dialogue between the two camps.

Ted Rogers, president of bitcoin wallet firm Xapo (which supports the Segwit2x agreement), argued in a mini tweetstorm that critics often misrepresent what Segwit2x members are trying to accomplish.

“Segwit2x is an honest attempt [at] bringing sides together [with] no split,” he said, before listing a few of the proposal’s benefits.

Rather than argue that Segwit2x is the one true bitcoin, Rogers contends that it will offer the market “a chance to see how different solutions play out.” 

The comments build upon what has been a larger drive by BTC1 supporters to frame the proposal as one supported by a free-market design strategy.

Here, the commentary was divided, if less acrimonious.

In response to Rogers, some bitcoin users responded with a chorus that is likely to only grow louder as November nears, one that stresses the idea that a software upgrade put forward by businesses amounts to a kind of hostile takeover.

Hinting at the heart of the argument, one Twitter user said:

“If a group of CEOs can simply get together and unilaterally change bitcoin, then that means a government could – and hence bitcoin is dead.”

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which helped organize the Segwit2x agreement, and has ownership stakes in BitPay, Bloq, ShapeShift and Xapo.

Correction: An earlier version of this article described Garzik’s removal from GitHub incorrectly. That has been corrected.