If anyone in the bitcoin space was asked what the most contentious element of the sector has been over the last six months or so, there’s a strong chance the response would be the Segwit2X fork. This hard fork, which was designed to “upgrade” bitcoin so as to allow it to grow into an increasingly large demand for quicker and higher volume transactions, has its pros and cons and it’s long been a divisive point among bitcoiners new and old.
This week, those opposed to the hard fork got the news they were looking for – that Segwit2X is delayed indefinitely and many are taking this to suggest that the action is not going to happen at all.
Whether this interpretation of the development is correct remains to be seen but it’s having a dramatic impact on price.
When the delay slash cancellation was first announced, the price of bitcoin ran to reach fresh all-time highs above $7900. Subsequent to these highs, markets gave back a portion of the gains and bitcoin dipped back against the US dollar to trade in and around $7100 but has since recovered slightly to current levels at around $7200.
So what does all this mean for the space going forward?
Well, this is where things get a little murky. Proponents of the fork are likely now licking their wounds, while those who rallied against it will no doubt be celebrating. This doesn’t mean, however, that the issue of scalability is resolved. Whatever happens, going forward, something is going to have to be done about maximum block size and, whether this turns out to be Segwit2X or not, it’s an inevitability.
One interesting side story is that Segwit2X futures are still actively trading across various exchanges, but they collapsed from highs of above $1,100 on the announcement to less than $150 a piece post-news. We don’t hold out much hope for a recovery on these futures near term.
Bottom line, this is just the latest development in what’s inevitably going to prove a crucial period for bitcoin and the cryptocurrency space as a whole long term.
We’ll be keeping an eye on things as they mature.
Image courtesy of Kevin Dooley via Flickr