Barry Silbert, probably known most for his creation of Digital Currency Group and large bitcoin investments via grayscale investments is currently trying to broker a scaling compromise between major miners, bitcoin companies and developers. He has reported last night that he has roughly 78% of mining hashrate on board with a scaling solution, but the final 22% will most likely prove the hardest to get. The larger problem is the solution being offered, which relies heavily on one side trusting the other, something that I believe wont happen.
The proposed scaling solution is miners let the soft fork of segwit happen and in return there will be solid plans for a 2MB hard fork within 12 months. The problem is, the lack of trust for core to ever bring out plans for a hardfork after segwit passes. Many on the bitcoin unlimited side say that the second segwit passes core will completely go back on their compromise because they now have what they want, which I agree with. At the same time I also think that it is wrong miners are blocking segwit, which would clear up some if not much of the transaction backlog because they know if they let it through they will lose a powerful bartering chip.
The problem with having segwit as a bartering chip though is I truly believe core will never barter with the miners out of principal. Core developers have stated multiple times that they would rather let transaction fees go to $50 than introduce bad code via a hardfork. Like I stated in other articles I think that at this point waiting and doing nothing is more dangerous than a hardfork. People point to the ethereum hardfork and the split into ETC and ETH as evidence that a hardfork is a bad idea, but I think a hardfork is fine as long as the vast majority of the community is in line with it. On top of that I believe that if some core developers showed they were willing to compromise, we might actually make some leeway.
So if you don’t know, in order to softfork you need 95% of miners signaling which means that effectively if barry could get 17% more hashrate on board they would be able to push segwit through, but the real problem is that perhaps the largest segwit opponent, Jihan Wu at bitmain, owns more than the 5% needed to veto the move. Jihan is just as stubborn as the core developers and is another one of the main players in this entire debate. If Silbert is able to convince Jihan to agree to this compromise, I believe core might endorse it also. However that is much easier said than done.
If the compromise is actually able to be set in stone and segwit is passed, we will most likely see many companies quickly adapt to segwit ready code which essentially takes advantage of the ability to have transactions with a smaller byte size. In my opinion this would cut down the current mempool problem and have fees fall by a decent amount. After that if core agrees and sticks to its promise they will make plans for a 2mb hard fork which will further increase the blocksize in the future. On top of that, with segwit lightning can be tested and worked on in bitcoin so the possibility of microtransactions can be brought back to the bitcoin space.
This is all hypothetical though because like I said, if Barry Silbert is able to convince Jihan and major core developers, I would be very surprised. I want to be hopeful, but unfortunately I think this will ultimately just be another failed attempt at bridging the gap. The real shame is essentially you have a small group of people on the developers side and one or two people on the miners side that can’t come to an agreement. Keep your fingers crossed for some progress.