Bitcoin is in the midst of a civil war.
On one side, people want to keep bitcoin transaction fees low. This will help increase adoption and encourage businesses to use bitcoin as a currency. A simple argument that seems reasonable.
On the other side, are people who want to keep fees high. Now, I know this sounds counterintuitive, but there is rhyme to their reason.
Essentially, one of bitcoin’s main features is its decentralised nature. Anyone can be a part of the bitcoin network by running a program that turns your computer into a node. However the computing power needed to run the node is constantly growing. It’s why we have bitcoin ‘farms’; large businesses with thousands of computers hooked up to provide the necessary power to run multiple nodes.
These institutional bitcoin miners are collectively taking over the network. And that is concerning people within the bitcoin community.
By keeping fees high for now, it makes running a node far less intensive. Which means more people making up the entirety of the bitcoin network.
So what exactly are they fighting about? Well, it’s called SegWit2X. A new upgrade for bitcoin.
Bitcoin Boom: How You Could Turn Every $500 You Lay Down into a $10,000 Cryptocurrency Fortune…find out here
Bitcoins biggest battle yet?
Bitcoin has already adopted the Segregated Witness (or SegWit) upgrade.
It was just as contentious at the time, but came and passed without a hiccup. In fact, it’s how we ended up with bitcoin cash. Which resulted from the split, or ‘hard fork’.
However, this new update SegWit2X differs slightly. As you can probably guess, it has to do with that 2X.
Basically, it’s going to double the number of transactions bitcoin can handle currently. It’s a bit more complex than that, but that’s all you really need to know to understand it.
The people who are pushing to adopt SegWit2X think it will help bitcoin by providing lower fees and faster transactions.
While the side opposing SegWit2X believe it will erode bitcoin’s decentralised nature. If the upgrade goes through, it could give a lot of control to the Bitcoin miners who will effectively monopolise the network.
Tensions are flaring on both sides as the deadline of late November closes in. While it is unclear who will come out on top it has led to a lot of uncertainty. Which may be playing a factor in bitcoin’s somewhat steady price.
At this point no one is really sure how it’s all going to pan out. If you own any bitcoin though, you need to be prepared for the goodies that could be on offer.
If SegWit2X is successfully adopted then it means there will be another hard fork. That means a new bitcoin offshoot, like bitcoin cash. That means free money for anyone holding any bitcoin.
However it all depends on where you’re holding your bitcoin. Coinbase, an exchange that is extremely popular and one that we recommend using, has announced their position. If you have any bitcoin stored on their site you will receive the new cryptocurrency.
Similarly, Bitfinex — another exchange — has also pledged their support to give users the new coin.
We’ll be sure to keep you updated as more news on SegWit2X becomes available. For now though, keep a close eye on your calendar as the civil war comes to a head.
And if you want to get your hands on some free money we can help. We’ve got a report that will show you how to buy bitcoin fast. Don’t miss out, get your free copy right here.
Junior Analyst, Money Morning