Dear Readers,
BIP 91 has officially locked in.
At press time, Bitcoin's miners, the network of computer operators that secure the blockchain, have now been signaling that they will upgrade the code for 269 blocks in the same signaling period, a move that takes the software one step closer to changing its structure to accommodate more transactions.
Stepping back, the move finds miners agreeing to cement the first part of a larger effort to upgrade Bitcoin, called Segwit2x.
The controversial proposal seeks to change the transaction structure of the network via Segregated Witness, and increase a cap on the amount of data that can be stored in transaction blocks, a move tentatively scheduled for later this fall.
With the signaling, mining pools nearly unanimously rallied behind the proposal, and BIP 91, designed partly to avoid a potential Bitcoin split in the network, emerged as the first major step in following the roadmap.
In response, Bitcoin saw a sharp price increase on Thursday due to the perceived forward progress, with some calling the BIP 91 lock-in a victory marking a "new dawn" for Bitcoin.
But, the lock-in is just the first step to activating SegWit on the network, and other steps come with a bit more complexity.
Specifically, the following things need to happen for it to activate:
There will be a 336-block "grace period," taking about two and a half days, during which miners have time to prepare for activation.
BIP 91 will activate at block 477,120. Theoretically, mining pools will start rejecting blocks that do not signal support for SegWit (BIP 141). In this way, BIP 91 is a "coordination mechanism" that gets other mining pools to follow along or lose out on mining rewards.
SegWit could lock-in during the next difficulty adjustment period of 2016 blocks, which takes about two weeks.
The latter is when Segwit activation is "all in the clear," as BIP 91 creator James Hilliard put it.
That's when Bitcoin's SegWit upgrade will be official, and an upcoming user-activated soft fork (UASF) proposal, BIP 148, superseded. BIP 148 is told to be suspended until around November.