Bitcoin Storm Rising

It’s the calm before the storm today as the cryptoworld prepares for the 1^st August SegWit event, which is expected to tell the market whether the possibility of the much talked about hard fork event remains.

In case you’ve missed out on all the hype, the biggest risk to Bitcoin and sentiment towards cryptocurrencies in general has been the possibility of a split to the Bitcoin blockchain, which could see some holders of Bitcoin lose the entire value of their Bitcoins, not to mention a possible shift in power over Bitcoin, as Bitcoin’s core developers and mining cartel look to agree on a ceasefire through support of tomorrow’s SegWit.

We won’t expect the power struggle to end here however, though both sides will need to play a smarter game to avoid losing the war, as the Bitcoin mining cartel look to push for increased blockchain capacity, which will most likely lead to greater centralization of the blockchain, whilst the core developers continue to push for greater decentralization, which is not only Bitcoin’s ethos, but that of all the cryptocurrencies that have been created since Bitcoin’s birth.

Over the weekend, exchanges were issuing warnings to clients over Bitcoins and possible issues that may be faced with regards to compatibility, with some Bitcoin holders considered novice to the nuances of the cryptoworld and the possible scenarios that remain in play ahead of tomorrow’s fork event.

There are two things that Bitcoin holders will need to be mindful of ahead of a possible hard fork, also known as SegWit2x, in order to protect the value of the coins held. Firstly, Bitcoin holders will need to store their coins in a wallet where the holder keeps the private keys and not keep the coins on a custodial wallet and secondly, coin holders should not make any Bitcoin transactions, whether sending or receiving, during or immediately after the fork and should wait for at least a few days for the dust to settle and for network stability to return.

The Bitcoin world is certainly in for a bumpy ride over the next few days, with Bitcoin sitting at $2,708.96 at the time of the report, with the recent lock-in of BIP91 another factor for the Bitcoin world to have to consider ahead of tomorrow’s main event. How events unfold over the next 24-hours or so could see Bitcoin hit new record highs and break through $3,000 or raise the prospect of sliding down towards this year’s lows of sub-$1,000, uncertainty and lack of know-how likely to be good enough reason for some to dump in the interest of wealth preservation, many likely to have locked in solid gains ahead of any possible negative outcomes.

With so much going on the cryptoworld, it wasn’t the best time for one of the largest Bitcoin exchanges to be shut down by U.S law enforcement agencies over the weekend, with the apparent operator of Bitcoin exchange BTC-e, Alexander Vinnik, being charged with 21 counts of money laundering and other related charges.

The Bitcoin underworld will always be there until such time as there is some form of regulatory oversight, the core developers more interested in retaining the concept of decentralisation than protecting Bitcoin’s image, while the miners continue to be fuelled by greed and the prospects of ever increasing income in the years ahead, should expansion in capacity become unhindered by the core.