Is Bitcoin having an existential crisis? After months of turbulence between the developers and the mining community, Bitcoin split into two different entities, one representing the initial version of the cryptocurrency and another called "Bitcoin cash," as of the beginning of this month. This was due largely to the adoption of the SegWit protocol, which allowed Bitcoin's developers to continue the process of scaling the cryptocurrency up in order to accommodate the wealth of new users and the massive increase in transaction volume which has taken place over the past year or so. Now, a report by Axios suggests that the developers of the leading cryptocurrency are adding a third version of the digital token as well.
Second Version Had Aimed to Speed Up Transaction Time
Bitcoin split into two, essentially, because of the network's flawed design from the outset, which prevented it from being able to keep up with the recent massive growth in the user base and the number of transactions those users are facilitating. When Bitcoin cash was introduced, developers hoped that this would help the problem. The second iteration of the coin could offer transaction capacities eight times the size of the original network.
Now, another group of Bitcoin developers is pushing for the creation of a third entity, designed to combine the best of the original Bitcoin and the newer Bitcoin cash. This would represent a new Bitcoin blockchain which would essentially operate by its own rule system.
Concerns and Benefits
An immediate concern is about identity: which Bitcoin would be the "true" cryptocurrency? Would one of them end up dying out as a result of lost interest among users? Would a third version truly be able to accommodate the different needs of the growing Bitcoin customer base? Or would it ultimately lead to more trouble than it would be worth?
There are, of course, many potential benefits of incorporating a third type of the cryptocurrency into the network. The third iteration would allow for a block size increase, which would theoretically speed up transaction speeds, but it would also incorporate the SegWit protocol. Thus, it would combine the block size increase of the second type of Bitcoin with the underlying protocol adopted for the first type of Bitcoin. Bitmain, the largest Bitcoin infrastructure company in existence, partnered with developer Jeff Garzik in May of this year to come up with the so-called "New York Agreement," which ultimately gave rise to the new Bitcoin iteration idea. Together, they decided to call it Segwit2X, and the third type of Bitcoin is expected to launch in November of this year. In the fast-moving world of cryptocurrencies, however, the time between now and then could bring about all sorts of unexpected twists and turns.