Mike Belshe, project lead for the Segwit2x hard fork, just announced that the controversial Bitcoin protocol upgrade has been cancelled. The split that was expected to occur on or around November 16th, has been suspended indefinitely.
The purpose of this software update was to trigger a 2MB block size increase at block 494,784 in order to help with the coin’s scalability and improve its transaction capacity, which is believed to be limited by the nature of software’s rules. The split had received early support from several Bitcoin companies and mining pools, but was getting more and more controversial as the fork date approached. It has ultimately been cancelled for a lack of consensus.
The news was disclosed via an email by Belshe, who is also the CEO of Bitcoin wallet provider, BitGo. He argued that the plan had gotten too controversial to be carried out as it seemed to be hindering the coin’s progress and leading to a division of the Bitcoin community, which was never the intention.
The email read:
"Our goal has always been a smooth upgrade for Bitcoin. Although we strongly believe in the need for a larger blocksize, there is something we believe is even more important: keeping the community together. Unfortunately, it is clear that we have not built sufficient consensus for a clean block size upgrade at this time. Continuing on the current path could divide the community and be a setback to Bitcoin’s growth. This was never the goal of Segwit2x."
Belshe further stated that the need for on-chain capacity increase will eventually become clear to everyone and the solution will then be found out by the entire community’s support. "Until then, we are suspending our plans for the upcoming 2MB upgrade," he added. Bloq CEO, Jeff Garzik, said in a recent statement that the development of an alternative solution that may support other bitcoin-family chains would continue.
In the wake of this news, Bitcoin price hit a new high of almost $7,888 before plummeting down to $6,977, and then bouncing back to around $7,700. This rapid price swing indicates a potential conflict between the short- and long-term impacts of the fork’s cancellation.
The email was also signed by five other proponents of the proposal, other than Belshe, who had met in May to agree on this plan. This includes Blockchain co-founder, Peter Smith, and Xapo CEO, Wences Casares.