What you need to know about Cryptocurrency: Part 7

Part Seven – Segwit2 and the Hard Fork (User Activated Hard Fork or UAHF)

What follows next is a flow chart predicting possible outcomes of the much predicted User Activated Hard Fork.  There is a lot in the chart we have not touched upon in this series.  I have provided it so that you can see this is truly “complicated.”  Keep in mind that the Bitcoin environment has no central authority.  Global decisions are made by referendums on which software versions miners and exchanges put into majority use.

A quick review on two terms:

DEFINITION of ‘SegWit (Segregated Witness)’

SegWit is the process by which the block size limit on a blockchain is increased by removing signature data from Bitcoin transactions. When certain parts of a transaction are removed, this frees up space or capacity to add more transactions to the chain.

Segregate means to separate, and Witnesses are the transaction signatures. Hence, Segregated Witness in short, means to separate transaction signatures.

Taken from: SegWit (Segregated Witness) http://www.investopedia.com/terms/s/segwit-segregated-witness.asp#ixzz4ocmfTN8g

Segwit2 takes this evolution a step further in that it increases the block size from 1MB to 2MB.

What are UASF and UAHF?

UASF stands for User Activated Soft Fork.

It’s a mechanism where the activation time of a soft fork occurs on a specified date enforced by full nodes; a concept sometimes referred to as the economic majority. A UASF requires a lot of industry support and coordination. The UASF concept was combined with SegWit activation in the BIP148 proposal.

UAHF stands for User Activated Hard Fork.

Developers add a mandatory rule set to change the node software. These changes make previously invalid blocks become valid after a flag day, which does not require a majority of hash power to be enforced. Bitmain, a major mining firm, announced “A contingency plan against UASF (BIP148)” in case UASF is applied.

Taken from: https://cointelegraph.com/explained/uasf-vs-uahf-explained