Bitcoin Is Dead! Long Live Bitcoin!

Following the cancellation of the SegWit2x fork, DAR issued a research report examining the current implementation of SegWit to see its potential impact on the Bitcoin network. We are distributing this report for free. Highlights of our analysis are:

·       It appears that the contentious SegWit2x hard fork scheduled for November 16th is now off. Leaders of the SegWit2x implementation and signers of the New York Agreement (NYA) backed down from the proposed implementation.

·       This avoids a dangerous network split, which would have likely caused long and erratic block creation times, high transaction fees, and slow transaction confirmation times.

·       The current network still has the original SegWit implementation, activated this past August, which has increased transaction throughput.

·       Our calculations show that SegWit can scale the network to a theoretical maximum of 20.3 tps, but a more realistic maximum throughput is 11.7 tps.

·       Vertical scaling solutions, such as SegWit and even the failed SegWit2x, still leave Bitcoin orders of magnitude behind the scale of centralized networks such as PayPal and Visa.

·       Horizontal scaling solutions, such as the proposed Lightning Network, will need to be created if centralized networks are to be threatened.

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