We've reached an important milestone but there are several more to reach before Segwit actually activates and Segwit transactions actually start hopping on the Bitcoin network and increasing the capacity.
So what BIP91 was for specifically was to lower the threshold for SegWit activation. That was its sole purpose. Now remember, the original proposal to activate SegWit with BIP 141 was released more than a year ago and it would require 95% of mining power to support it in order to activate SegWit. So BIP91 was simply taking a vote on whether the existing SegWit proposal should be lowered from a 95% threshold to an 80% threshold. That's all it was really designed to do. Now the rationale behind requiring 95 percent of support in the first place was that if SegWit were locked in, it would only leave a small band of rebels with 5% of the mining power, who would quickly find it unprofitable to mine on their own without SegWit. So lowering the threshold to 80% makes the SegWit threshold easier to reach. Yes, but it means SegWit could activate with the rebels controlling as much as 20 percent of the mining power and that could well be enough to sustain a classic version for Bitcoin with no Segwit!
So right now we are looking at https://www.xbt.eu/ website. As it stands right now BIP91 has locked in. Meaning the threshold to activate SegWit will now be lowered to 80% of mining support. So now as that happened miners have a grace period of 336 blocks or about 2.3 days to get their systems ready. Because once the grace period ends, any blocks that are mined, that are not signaling for SegWit will be rejected as being invalid! So that means the miner who submits the invalid blog will not receive their block reward despite having in care all the energy costs and all the computing costs to mine it. So now there's an economic incentive to join the SegWit crowd because it has the majority.
Interestingly enough, this is very similar to what would have been the User Activated Soft Fork in a UASF This is very similar to how that would have gone. BIP 91 is technically an MASF or a Minor Activated Soft Fork that does pretty much the same thing. It enforces activation of SegWit.
So what then? What happens after this grace period? Do we get SegWit then? Well, No. Not yet!
Right now as we saw from https://www.xbt.eu/, we're about 216 blocks away from the end of the grace period. That takes it to like Sunday morning in the US. And then from there, We need to lock in SegWit itself, which we now know requires 80 percent of miner support. Now the difference here is that Segwit itself has an activation period of 2016 blocks. Meaning that within 2016 blocks, at least 80% must signal for SegWit. So 2016 blocks, that's the same period by which Bitcoin adjusts the mining difficulty. Every 2016 blocks the difficulty adjusts to keep the block time to ten minutes because if more miners, more mining power comes online then the blocks get sold faster and then it might reduce the block time to like name at is eight minutes.
And that's Bad! Because we need to maintain it at ten minutes. So it requires the difficulty to be increase so that the mining power is roughly taking ten minutes to mine a block. So within the 2016 blocks which is the activation period for SegWit, if 80 percent of blocks mined in that period signal for SegWit, if that happens then SegWit will be officially locked in. Kind of like we just did with BIP91. We locked it in then it's going to activate at the end of the grace period. Same process needs to have with SegWit. It needs to be locked in first and then it needs a grace period before actually activates.
So once SegWit is officially locked in, there's another grace period that will last about 14 days which is 2016 blocks before SegWit officially activates and actually starts running on the network. So for now though, the next milestone is Sunday morning in the UK when the BIP91 grace period ends.
So I'll report back on Monday once that has happened and then explain the next steps. I've given you bit of a taste of them just now, but we'll go back over that again once it actually happenes and we can forget about the BIP91 grace period because that would have been completed. So that's my update on the whole Bitcoin forking, scaling, SegWit situations for today.
Alright guys that's all for today I'll be back on Monday with another edition of the market roundel and another edition of the news and so until then, it's me AntiMatter, saying bye for now!
Peace!
