Over the last month we have seen an accelerated amount of effort being put into finally fixing the problems that have been bothering real users for months now. As the dust is not nearly ready to settle, we can at least make out the terrain and the big players.
What many have been expecting is playing out before our eyes. We are going to see a divorce and two chains will continue their own ways. It does not help anyone to go over the history of how we got here, it just matters that there is too much fighting and sleepless nights on all sides. The end result has been becoming more and more clear to everyone close enough, Bitcoin as a whole will lose everything if we can't move forward.
When the developers and self-appointed experts can't decide on which product to put in the market, we should not stall all progress but instead bring both of them on the market and let the people vote with their money. Let the market decide. In the long term the open market always is the wisest of us all.
For me the math is simple, if we get 5x the amount of paying customers in a year, then the SegWit chain can't support them, which will be a horrible experience due to long waiting times again. So the greatest growth, and the highest prices, are going to be on the chain that has its ducks in a row and allows for scaling in the short term.
Based on this, the most interesting solution we observed is the UAHF. Which is short for User-Activated Hardfork. I want to share my findings on how this one works here;
The chain-fork activates on a specified date. Set to 2017-08-01 12:20:00 GMT
Miners that switched to mining this will follow the current chain up until that point, but diverge after this time.
Major features are;
First block (one block) has to be larger than 1 MB.
This definitively marks the chain-split and old clients won't follow it so we cause minimal disruption. Similarly, we avoid many problems with regards to attacks by other hashpower. Once this block is mined, we are following the updated rules, nothing can be done to change that.
Block-size limit is enlarged.
We get a large breath of fresh air. The limit of 1 MB is removed and miners will mine up to 2 MB blocks. We allow for future growth without additional protocol upgrades until 8 MB.
Optional Bi-directional Replay protection.
When the chain-split happens normal transactions created on one chain will be valid on "the other chain". This is an issue for people that want to trade between those chains or simply want to avoid a transaction on one chain to be valid on another.
Software will need to be updated to support sending and receiving those special transactions. Normal transactions work fine in all existing chains.
Transactions can opt-in to use a more secure way to sign transactions. Without making transactions larger, more information is being used in the creation of the signature which will allow a number of new features immediately. These include malleability fixes, hardware wallet security and replay-protection.
Bitcoin Classic will support the UAHF chain with a special release soon.