The concept of “let the free market decide” simply implies to a market situation where there is no monopoly, authority or government influence on the economic system, businesses and consumers to determine the prices of products and services.
This concept is what Bitcoin startups, like Segwit2x, a unique Bitcoin software that is scheduled to enter the market in a few weeks, are determined to exploit.
Not all Bitcoin Core developers (investors and businesses that support this work) are in agreement on the proposed Bitcoin software change. It is therefore highly likely that the mid-November fork will also see new Bitcoin cryptocurrencies developed.
All in all, the Segwit2x group has two very important groups of supporters by its side; Bitcoin businesses and miners, and has maintained its stand that these are a full representation of all the users.
Among the groups that claim to be in support of the upgrades include Coinbase and Blockchain (the two most popular providers of consumer wallets), mining pools (who represent about 80 percent of the computing power of Bitcoin) and many Bitcoin companies.
The opponents of Segwit2x have bashed the companies in support of Segwit2x claiming that they’re attempting to “take over” or “corporatize” Bitcoin because according to them this proposal is insisting on changing Bitcoin rules that all users don’t agree with. Naturally, many startups don’t have the same opinion.
To begin with, many startups feel that the company is simply trying to advocate for a change that some of their users support. The second thing is that many startups don’t see themselves as important or powerful contributors to this debate.
Hugh Madden from ANX Bitcoin Exchange CTO said that this is simply a material event that may indicate what is most important to the development community and miners. These are perhaps the most influential actors in the ecosystem.
Planning for a Division
Bitcoin startups have reflected a similar sentiment in their policy updates released as the Segwit2x is being anticipated.
Segwit2x has categorically stated that its goal is not to split Bitcoin but rather to upgrade it. But even with this, it’s highly likely that many users will not move to the new blockchain. And pro-Segwit2x companies are already preparing themselves for such an outcome.
Blockchain in one of its Bitcoin wallets reads “there is a very high chance that there will emerge two Bitcoin blockchains in the planned hard fork.” They have already put in measures on how to deal with user funds in case of a split.
The plan, according to the post, is for the blockchain to support the highest number of computers that support the blockchain (also termed most accumulated difficulty) and name that “Bitcoin.” The “minority chain” will also be put I the market for trading if it has a significant value.
The post further warns that due to the network instability rising from the hard fork, the transactions could be suspended temporarily.
Other similar Bitcoin companies have also outlined similar steps in the event of a division. Sebastian Serrano, Ripio founder also state over email that its wallet will take the direction taken by the chain with “most accumulated difficulty”.
Another company that has indicated that it follows suit is Bit Pay, the largest payments processor in the network. It announced on Wednesday that it will “suspend debit card reloads, payment disbursement and payment acceptance approximately 24 hours before Segwit2x is activated.
Does This Present An Opportunity For Startups?
Although startups seem to agree on the steps to take in the event of a split, there is a general disagreement about the real possibility of a split. Ryan X. Charles, co-founder of Yours and a loyal supporter of Segwit2x believes that Segwit2x has a higher possibility of winning because of the support they are getting from businesses and miners.
There are, however, some miners and startups with a different opinion. One of these is Crypto Facilities, who through its CEO and Co-founder Timo Schalaefer has expressed doubt in a Segwit2x win. He cited node counts and prediction markets as the reason.
But there is yet another group of startups who see a Segit2x-induced split as a way to advance their networks in this very volatile network times. Steve Beauregard, GoCoin founder, for instance, said there is a possibility of the payment processor accepting a token from both chains as long the liquidity they provide meets the standards.
Yet other firms even those who originally signed in to Sewit2x are simply taking the approach of wait-and-see. Madden from ANX’s CoinDesk in a statement said that it is totally messed up. They will be carefully monitoring the situation and will plan for a significant outage before deciding on whether to support both chains and which one to support if they pick only one.
Loyal To the Free Market
Ideology also plays a big part in addition to pragmatism.
Bitcoin is expected to work as a payment mechanism for the companies that signed the Segwit2x agreement. And as a payment mechanism, it is expected to enjoy a larger block size capacity that contributes to a reduction of fees for users and allows more per-block transactions.
In his statement, Serrano from Ripio said “I’m persuaded that to hit 100 million Bitcoin users there is a need for a greater capacity. Most of us became sure that Segwit2x has the potential of steering the Bitcoin when it concurred the milestone of the New York Agreement.”
Others like Erik Voorhees, CEO of Shapeship also believes that the agreement was a major milestone in the advancement of the network. It stimulated the original intention of increasing the block size and pass SegWit.
They are still determined to fulfill their agreement of upgrading the Bitcoin protocol to both a 2 MB base block and SegWit. It is possibly due to this very agreement that SegWit activated even after the mining support it was gathering failed to reach even 40 percent. And so they will keep their word to support it until it comes to an end..
Like Beauregard, Voorhees is also trying to be modest not to scare away potential customers by suggesting that it will ensure the decisions the company makes now won’t be disruptive to the growth of the company in future.
Voorhees also stated, they understand that not everyone is in agreement with this approach. But they will continue to offer support so that it moves in a direction that profits the growth and development of Bitcoin in the long run.
They will continue to develop according to consensus if this is the status quo that the market prefers. But if it’s the Segwit2x upgrade, which is also the result they prefer that the market favors, then they will still stand with the consensus.
Overall, many startups in the industry remain adamant to the feeling that the decision should be ideally be left for the market to make.