Bitcoin New ALL TIME HIGH?
BIP91
After much fighting and debate the last couple months and the stall of a perfectly good bull market, the Bitcoin Network has finally come to an agreement on a scaling solution. Segwit activation is now certain as BIP91 has become locked in. 51% of the network hash power is still needed to mine blocks that support Segwit. If this is maintained Segwit will be activated and a chain split will not occur.
BIP91 is very similar to BIP148 and were both discussed as scaling options during the “New York Agreement”. They are both methods of activating Segwit albeit in different ways. The activation period is now 336 blocks instead of the original 2016. The activation threshold has been reduced to 80% as opposed to the original 95% because the latter was agreed upon to be an unrealistic goal.
Segwit allows for the scaling of the Bitcoin network to increase dramatically. The number and speed of transactions will be able to increase making the network more efficient. The network will also be able to handle microtransactions without ridiculous high fees. These effects should all help with the future adaption of the Bitcoin Network by removing the side effects of growth that the network experienced recently, such as enormously high fees and slow transfer times. If the network does run into scaling pains again Segwit allows for other technologies to be implemented, such as the Lightning Network to remedy any issues.
As for miners, they will need to be running the BC1 software developed by Jeff Garzik and signaling for BIP91. Because BIP91 is currently locked in, miners will start to reject blocks that are not signaling for Segwit. Miners that are not signaling BIP91 will have their blocks rejected and this will lead to a loss in revenue. This is basically an incentive and assurance that Segwit is activated. Very similar to BIP148.
What about the chain split? The chain split issue is not necessarily over but it is a lot more unlikely. Per the “New York Agreement” if Segwit activates via BIP91 than it will supersede BIP148 and the network will have no chain split. The fear of a chain split is very real and I think that is what has been holding back investors during this recent correction. Now that a chain split has a relatively small chance of activation we saw a very quick uptrend in Bitcoins price. Bitcoin shot back up to $2900 today 7/20 and I think in the very immediate future it will be pushing its all-time high, if not by the end of my writing.
Now that everyone in the community is happy with the way that the Bitcoin network is being built, where will the price go from here? I think in the very short term in will test the all-time high. For the next couple weeks, I think we will see a steady uptrend as Segwit continues to activate. Once activation of Segwit I locked in, I think we will see another quick uptrend to a new all-time high between $3500 and $4000.
By Dan P.