Just last week, the Bitcoin made headlines as prices achieved record figures reaching above $3000. Only valued for a couple hundred dollars in 2013, this decentralized form of currency is making headlines for its growth and lucrative opportunities it presents.
Despite these headlines, investors should be aware of the judgement day is coming on August 1st for those who use the cryptocurrency. In an effort to upgrade the Bitcoin network and, developers are attempting to modify procedures that will make a portion of previously transactions are made invalid, while the rest of the previous transactions are still valid.
This upgrade also known as the Bitcoin Improvement Proposal 148 (BIP148), is a User Activated Soft Fork (UASF) that will encourage users to influence miners to upgrade the SegWit. According to Seeking Alpha, the update is designed to primarily eliminate the cryptocurrency’s infamous issues with transaction malleability. With many users having a problem withdrawing bitcoins from their accounts, the integration of the Lightning Network will be a permanent solution to bitcoin’s transaction speeds.
If miners fail to upgrade before August 1st, users will have difficulty selling coins produced after the deadline. The Bitcoin could split into two different values and the authentic bitcoin would be determined by the greater number of transactions and value in prices. On the contrary, if a majority of users and miners follow this update, the change will run smoothly and no one will have to change their software.
Bitcoin enthusiasts and owners have been reluctant to welcome this change. With numerous risks to the upgrade, many are afraid that the improvements will cause a “split” that will create two versions of the bitcoin with different values.
Mike Belshe, chief executive officer of Bitgo, added on the matter, “In a lot of ways, bitcoin already has split. A lot of people aren’t using bitcoin anymore. People are moving their coins out of bitcoin, converting it to another coin…. If the bitcoin performing and executing on all cylinders two years ago and meeting the demands of all its constituents, would we have all these other coins at all? Bitcoin had all the market share. Today it doesn’t.”
Others are frustrated that the adoption of SegWit is a “declaration of war” on Bitcoin miners. Currently, only this proposed plan only has support from 22% percent from related companies with a deadline less than two months away. Paul Sztorc, a bitcoin developer at Bloq, said decentralized form of government “can’t succeed unless the developers and the miners work together at some point”, but the proposal has not gained any support from neither sides.