My thoughts on SegWit2x Hardfork & what’s the deal for Bitcoin?

I’m sure like me, most of you were trying to read, hear and curate answers surrounding the below questions, in this post we will learn what’s out there for SegWit2x and the hardfork for bitcoin

Is a hard fork inevitable for Bitcoin?

Is a hard fork necessary and potentially the best solution to Bitcoin’s block size debate?

Is the hard fork a big deal?

What’s the New York agreement surrounding SegWit2x? 

Will central planning of block size work?

I was trying to understand the whole SegWit2x, Hardfork what’s the confusion, what’s the politics and after a lot of reading and being thrown off from one news read to the other, I finally segregated the issue in my head :-)….The Upcoming Hardfork "SegWit2x" will split Bitcoin into two coins. Unlike previous forks, this fork is highly contentious, and both of the new coins want to be called "Bitcoin".

The politics and the rhetoric’s get more and more interesting when you hear both sides, I think a mash-up is a great solution to the problem, but with the hardfork and running 2 decentralized chains, will never make the real Satoshi unhappy!

Let’s forget SegWit2x for a second and think about days in the life marketing decision making to sustain a product or a brand, just imagine if there were 2 ways to doing something.

First way is the Rhetoric way & believes in the invention, the core idea & follows its basic birth principles and not chasing the market aspect or the network aspect or the monetary/profitability aspect, trying hard to churn the first principles and still be competitive and unique. (Bitcoin Core)

Second way is to relax and bend the rules to stay profitable and keep yourself up in the game with event and network effect based disruption, reason to go second way is for survival at times, but often considered the easy way. A way that believes in the whole market aspect of “sunk cost” (Bitcoin Unlimited)

Applying this to the 2 parties that are at conflict with a hardfork, reasons are simple

Let’s understand these 2 parties and their thoughts

(SET1) SEGWIT- NOT2X not supporting the hardfork (Supported by Blockstream and Bitcoin core and incumbents)

These folks want SegWit : the (Witness) Digital signatures to be removed from the Block to help more transactional throughput to the block, freeing up block size will allow for more transactions. However, they are against the hardfork and truly believe in keeping the core chain as-is.

Folks not inclined to the hard fork fear the following: 

Approx. 100GB is the current Bitcoin network which already is too heavy to download on a node, Block size is 1MB & if the blocks become bigger, it will take a more expensive infrastructure/computers to run a full node.

This will affect hash rate amidst other technical complications speculated, These guys prefer to bite the dust but not resort to the hard fork, as they feel every problem will come with a hard fork option and it will become a cadence of disrupting first principles. They don’t want another Bitcoin Gold, or another Bitcoin Cash which are initial hypes but not paradigm shifting decisions to move bitcoin forward.

(SET 2) INCREASE BLOCKSIZE- SegWit2X supporting the hardfork

• Activate Segregated Witness at an 80% threshold, signaling at bit 4 
• Activate a 2 MB hard fork within six months

What is the New York agreement?

Adopt SegWit and then double the block size [Segwit2X].

58 Companies signed it 

Folks inclined to the hard fork fear the following: (In Roger Ver’s own words) 

1. 1MB is too small and cannot compete with the other coins out there. 
2. Fees has increased now and its making it difficult to stick with the core aspect of low /no-cost, efficiency and speed aspect advantages of bitcoin. When these KPI's are impacted, the cascading effect will cripple the network effect and first mover advantage for bitcoin. 
3. Central planner concept goes against the philosophy of De-centralized consensus based decision making. 
4. User experience has been suffering lately. 
5. In a FIAT currency model, it’s difficult to move from Dollars to Euros to some other currency; however it’s very easy to move from one Crypto currency to the other making it very critical for bitcoin to stay competitive and scalable with the other Altcoins and crypto currencies out there. 
6. Fees will keep going higher as people are competing for place on the block. 

....further

More central planning is going on for SegWit to decide ideal block size that should not be the case, the market should drive the block size even if it means bigger block size and even a hard fork, if both sides don't get into a consensus for one protocol for the Bitcoin Blockchain. Central Planners also double back their intentions that high fees is OK, longer consensus time is OK, existing transactions per Block is acceptable, owing to the secure and consensus driven mechanisms offered.

Bitcoin Cash hard forked the bitcoin Blockchain earlier this year…. Ethereum has hard forked in the past and there have always been 2 sets of people that wanted different ways to keep the platform competitive.

There is so much more on the technical side of this, would suggest reading on the following topics surrounding the hard fork. Lightening network, BIP 148, Replay Protection, transaction malleability

• What will happen/what to note if the hard fork happens? 
• Will it affect the hash rate? 
• Will it make the Bitcoin Blockchain vulnerable? 
• Need to ensure "Replay Protection": Don’t move your BTC for a month, have control of your private keys, take the BTC off a exchange into the Wallet, put your coin on the appropriate chain? 
• People will choose from the options even if there are 2 chains, 2 coins. More options, more to choose from.

Further interesting reading

Frederick Munawa Blockchain.global , my mentor in the Blockchain space, interviewed Roger Ver on the same topic on www.blockchain.global ”Why Bitcoin Should Hard Fork With Roger Ver" an amazing podcast http://blockchain.global/blockchain-innovation/ about how important it is for bitcoin to hard fork to be #1 and retain its network effect and first mover advantage. The most awesome Quote from Roger Ver is that "it’s great to be technically inclined, but without getting the economics right, the business cannot scale and stay competitive"

The SegWit2x Hardfork did not happen finally , read the Techcrunch article and follow the news https://techcrunch.com/2017/11/08/segwit2x-backers-cancel-plans-for-bitcoin-hard-fork/

Also read the Coindesk article on the Hardfork 

Conclusion

I believe based on all this analysis that the Hardfork is definitely required sooner or later to keep bitcoin competitive in the open marketplace of Cryptocurrencies.