Mark your calendars (in pencil, as this date may change): November 13, 2017. The mother of all hard forks will finally trigger, which will split Bitcoin into two tokens.
Even before cryptocurrencies took off like crazy at the beginning of 2017, different bitcoin developers, miners, and investors were already squaring off to debate the best ways to continue to develop the leading cryptocurrency. (See more: The War Between Segwit vs. BIP148 vs. Bitcoin Unlimited.) One of the biggest questions they faced was how to increase the number of transactions that the blockchain (the technology which supports bitcoin and all other cryptocurrencies) can process per second.
Bitcoin has grown at an astonishing rate, and the interest among investors has largely overloaded the system as it was initially set up. Other cryptocurrencies have found new ways of increasing their transaction capacity. Will bitcoin be able to do the same? It seems that if bitcoin is to grow in this way, it may need to experience a fork in November.
SegWit2x Hard Fork
The process of “hard forking” entails bitcoin being divided into two separate currencies. A hard fork, which may happen around November 13, would happen when the so-called SegWit2x protocol is adopted. According to a report by Forbes, bitcoin protocol developer Matt Corallo explained that the decision to adopt the new protocol (and, therefore, to hard fork the cryptocurrency) was not a discussion at all. In fact, Corallo says the decision to hard fork “was pretty much a declaration,” and this process is “fundamentally incompatible with the process that is bitcoin core.”
What does a bitcoin hard fork mean for the average investor? To begin with, some exchanges are offering what they call chain split tokens. These function as futures markets, of a sort, in which users and investors can take sides about the hard fork. According to Forbes, activity in this area reveals that the “vast majority of community support is against the hard fork.” In fact, across a number of exchanges, the split tokens are trading at about 15% of the current value of bitcoin.
Too Late to Turn Around?
There is some indication that it is too late to stop the hard fork process, even in spite of community opposition. The first part of the plan activated in August, setting the process in motion. (See more: Bitcoin Cash Set To Undergo Hard Fork.)
It’s also possible to view the chain split token activity in a different light. Because the volume in this area is just $2 million per day, it may not be as representative of community perspective as some analysts have suggested.
Bitcoin miners may be more inclined to support the split, with 75% supporting the protocol adoption since last July. Corallo dismissed the notion that miners would end up attacking the minority chain in the event of a split, saying that “you have to take 15% of the hash power globally that you have and attack this chain instead of mining something useful, and if your attack works, all this money you spent on mining these blocks is useless.”