Yesterday, CryptoHQ revealed a nightmarish scenario for any Bitcoin Core supporter. What if Segwit2x won? What if Core became the minority chain after the mid-November hard fork? bitcoin.org Cobra analyzed this outcome and come up with a solution: fight and change the Proof-of-Work algorithm, thus open the possibility of a three-chain split.
Today, we will present even more possible scenarios through the eyes of Bitcoin developer Jimmy Song. Song posted a blog on Medium on Tuesday presenting three ‘Game Theory’ scenarios. However, there is a caveat, according to the developer: the scenarios are ‘unlikely’ to happen. Most probably, the outcome will be much more complex and quite possibly a combination of the three.
To understand, let’s present each of the three scenarios individually.
Scenario 1: Bitcoin Core Capitulates
No, this is NOT a joke. It can be an outcome. Nevertheless, it’s VERY UNLIKELY to come to pass and Song is aware of that.
Cobra talked about the need to regroup and fight in case Segwit2x wins. Core supporter WhalePanda asked if the Bitcoiners are ready to give up their financial freedom and put it in the hands of a couple of VCs and CEOs. And they are definitely NOT alone. Every single Core supporter is screaming from the top of his/her lungs: FIGHT! and DON’T GIVE UP!
Now is someone expecting they all suddenly have a change of heart and submit to the New York Agreement (NYA) ‘corporate takeover’?
We didn’t think so.
Scenario 2: Segwit2x Is Abandoned
Now, there’s a more likely-to-happen scenario. But is it truly? Jimmy Song doesn’t think so. And if we look at the numbers, he may be right.
According to Coin Dance, in the last week, almost 82% of the Bitcoin miners signaled their intention to hard fork and double the block size. In the last 24 hours, there is still a 76% mining power going with Segwit2x. We are a week away from the hard fork so to expect all miners abandon Segwit2x is sort of ludicrous.
A single miner supporting the 2x hard fork can make the fork actually happen.
Song explains: “First, a single miner supporting the 2x hard fork can make the fork actually happen. A unanimous abandonment of 2x would have to occur. The fact that ViaBTC was able to single-handedly hard fork Bitcoin to produce Bitcoin Cash shows that a single motivated miner can cause a fork. Second, this requires the entirety of the NYA to be abandoned at once. Given how close we are to the actual fork, this would be a massive credibility hit and is unlikely to occur for that reason.”
Scenario 3: Segwit2x Happens
The most likely to happen scenario from the three. What does this scenario imply? Most of the miners stay honest and start mining 2MB blocks. The Core full nodes don’t accept these blocks and wait for the traditional 1MB block to be mined. A split happens causing chaos in terms of hashing (mining) power.
If this event occurs, it’s likely the Segwit2x chain will have the majority of mining power. And, for Song, this means “that both chains will more or less be normal in 4 months.” In this case, normal means functioning properly with no delays and blocks mined evert approximately 10 minutes.
There is also a matter of reward and profitability. For the miners to continue and mine the Segwit2x chain, they need a big incentive. Which leads us to the following outcomes, as per Song’s blog:
- Price follows Hash Power — The price of B2X coins goes up a lot (around 36x), the price of B1X coins goes down a lot (around 1/36) or some combination thereof.
- Hash Power follows Price — Hash power moves from B2X to B1X (Something like 75% of total hash power moves from B2X to B1X)
- Massive Dollar Injection — B2X is bought with outside money and causes it to go up (around 36x), B1X is short sold with outside money and causes it to go down (around 1/36 of before) or some combination thereof.
- Massive Hash Power Injection — New hash power is brought into B1X.
A combination of the outcome presented above is also likely.
The conclusion? Remember our previous Segwit2x article present Cobra and WhalePanda? Guess what? The game of chicken is on!
What do you think? What outcome do you think will prevail? Please share your opinion with the rest of us in the comment section below.