Support for Segwit2x, the New York Agreement, and the Upcoming Bitcoin Fork Explained

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Last updated on October 11th, 2017 at 12:27 am

A little over three months ago, SegWit, a Bitcoin upgrade, was activated after a long and hefty debate. The result of this debate also created an altcoin called Bitcoin Cash, which was created as the opposition to the Segwit solution. Now, we’re on the verge of another split in the Bitcoin network called Segwit2x. For a complete history of everything that’s happened until now, read this post.

The much-awaited Segwit activation came with a condition: a block-size increase within three months of activation (i.e., a hard fork). Miners who were initially against Segwit activated it under the terms of the so-called New York Agreement (NYA). The NYA is also known as the Silbert or DCG Agreement after Barry Silbert, the deal’s broker and the founder of the Digital Currency Group. Silbert brokered the deal between various industry players, most notably mining firm Bitmain, the Coinbase exchange, and the BitPay payment service.

The SegWit soft fork is seeing steadily increasing usage to the network’s benefit (such as lower fees). Further dependent improvements (chiefly, the development of the Lightning Network) are virtually assured. Focus has now shifted to the NYA’s final part, which demands a mid-November 2017 hard fork to increase block size.

NYA main points

Text from the agreement’s announcement on Medium.com

This hard fork is now commonly referred to as SegWit2x, or “S2X.” S2X is implemented in code as btc1 by former Core developer and Bloq CEO Jeff Garzik. It’s scheduled for activation at block height 494,784. The estimated time remaining is displayed via the 2x Countdown site.

6 Major Objections to the NYA

NYA has proven highly unpopular among the Bitcoin user base, judging by commentary and activism across various media platforms. Many Twitter users have adopted the NO2X tag to signal their resistance. As more concrete evidence, consider the number of nodes (97.7% at the time of writing) that have chosen not to switch to btc1:

No2X nodes
A breakdown of recent Bitcoin client distribution from Coin.dance; btc1 is displayed as khaki.

Here are the top six objections to the agreement:

1) The primary objection is political. Although the meeting was called “Consensus,” it involved only a small sample of CEOs. The NYA was concluded without input from Bitcoin developers, a majority of companies, or millions of users.

2) As SegWit and its related improvements have already upgraded the transaction capacity of Bitcoin blocks, there’s no pressing need to raise the block size further. Blocks are far from congested. Thus, the secondary aim of the NYA lacks justification.

3) As hard forks are inherently and unavoidably risky and disruptive, they’re best reserved for emergency usage. The only exception is a hard fork with unanimous support that’s been planned long in advance. Forcing through a hurried hard fork with only minority support for no tangible benefit (see point #2) will likely achieve nothing besides chaos and the creation of an S2X altcoin.

4) Multiple Core developers are on record as likely to halt all code contributions should S2X become the dominant chain. All contributors who’ve made their positions known have indicated their rejection of S2X. Without the competence and experience of these developers, the future of Bitcoin is highly uncertain.

5) S2X does not include comprehensive replay protection. This means that after the fork, a transaction on either chain may be “replayed” on the other. This is dangerous and likely to lead to losses. Users who are unaware of this issue will send equal amounts of both S2X and BTC whenever they attempt to send only one kind.

6) S2X has deliberately opposed Core’s attempts to prevent a messy network split with certain code in the 0.15 and later releases.

The NYA: Less than the Sum of Its Parts

In the course of our assembling a spreadsheet of companies listed in the NYA, some interesting facts emerged. Let’s begin with a simple count of the signatories:

Total Number of Signing Entities: 56

This is a fairly impressive number at first glance, but it doesn’t hold up to closer examination. Further, it is outweighed by the number of companies that have withdrawn from or never signed the NYA. This list of nonparticipants shouldn’t be considered complete either; countless companies and projects have simply not expressed a preference either way. It also remains to be seen how many miners will redirect their hash rates from pools that don’t follow their preferred chains.

Total Minus Individuals: 54

From this total, we can subtract two individuals: Gavin Andresen, a former Core developer, and Guy Corem, the former CEO of defunct ASIC manufacturer Spondoolies. Because neither individual is an active developer or CEO, their support for SegWit2x is unlikely to extend beyond PR or perhaps the running of a node. As such, they may be discounted as no more influential than any other Bitcoin user.

Total Minus Individuals and Yours: 53

Ryan X. Charles’s “Yours” startup is a signatory; however, about a week before signing the NYA, Charles announced his decision to switch his project from Bitcoin to Litecoin. As such, Yours has no real stake in the future of Bitcoin and may be discarded as irrelevant.

Total Minus the Foregoing and Subsidiaries: 46

From this total, we may safely deduct the signatures of all subsidiary companies as redundant.

1) Bitmain manages and supplies a number of signatory pools: 1Hash, BTC.com, and BTC.top. All of these pools’ contact details point directly to Bitmain. ViaBTC has already broken the terms of the NYA by mining Bcash, and it’s received about ¥20 million in funding from Bitmain and private investors.

2) Two DCG subsidiaries signed the NYA: Grayscale Investments and Genesis Global Trading.

3) Decentral is the Canadian “innovation hub” that develops the multicoin Jaxx wallet. Counting Decentral and Jaxx as separate entities makes little sense.

Total Minus the Foregoing and Firms That Have Retracted Support: 41

SegWit.Party displays updated stats on S2X support, along with links to evidence of position changes. It indicates that five signatories have thus far publically withdrawn from the NYA:

withdrawn from s2x

Total Minus the Foregoing and DCG-Funded Firms: 16

If we next subtract all the companies that have received funding from the Digital Currency Group according to DCG’s portfolio page, we’ll reach a less-impressive total of a mere 16.

Given that DCG is, in many cases, the majority investor in such companies, these firms may arguably be considered tantamount to subsidiaries. After all, major investment tends to purchase a degree of control, especially over small startups.

This may be the most questionable subtraction, as in many cases, the amount of funding received—and thus, the degree of DCG’s influence—is unknown. It may be that some of these companies are capable of operating entirely autonomously of DCG.

Segwit Consensus

Preparing for the Split

Users who were present for the Bitcoin Cash hard fork should have an idea of what to expect. The first rule is to get your coins into a wallet that is under your control. This means moving your coins off exchanges or any other web wallet. Make sure you have access to your private keys.

As the fork date comes closer, more and more exchanges will probably release statements regarding their plans to handle it (e.g., Coinbase’s statement and Bitfinex’s statement).

The major difference this time around is that it won’t be safe to spend coins after the split has occurred due to the lack of replay protection. At this time, we advise all Bitcoin owners to sit tight and wait for a clear plan of action. It may be necessary for users or companies to manually separate their coins, although there are as of yet no clear guidelines for doing so. We would advise users not to trade around the time of the split and to wait for the “all clear” before resuming normal operations.

Hash Power and Block Times

Unsubstantiated leaks have circulated of late indicating that some major miners fully intend to redirect their hash rates to S2X and perhaps even to attacking the incumbent Bitcoin chain. The more hash rates that switch chains, the slower the blocks on the other chain will be until the difficulty adjusts.

While the removal of significant hash power could result in delayed transactions and higher fees for a time, the market would likely correct the imbalance. The situation would be similar to Coke’s exiting its market: soda would be undersupplied only until the remaining competitors ramped up their operations.

What about “Bitcoin Gold”?

Some of you may have heard about Bitcoin Gold, but this has nothing to do with Segwit2x. Bitcoin Gold is yet another hard fork that is planned for October 25th. We’ll elaborate on it further in a different post.

To Conclude: Keep Calm and Own Your Private Keys

In the end, November’s upcoming fork seems like almost the same story all over again. Users should keep their private keys at hand and refrain from conducting any transactions until the coast is clear. What will happen to Bitcoin, its price, and its adoption? No one can really say. This is just one more “free market” exercise we’re going to have to experience in real time.

For a full list of Segwit2x opposers, visit NOB2X. Feel free to add your company as well if you feel like it. What’s your opinion of S2X and the New York Agreement? I’d love to hear it in the comment section below.

Steven Hay

I'm a former futures trader. My keen interest in matters financial, economic and political eventually led me to conclude that the current, debt-based fiat system is broken. It was a natural step from there to investing in gold and, in early 2013, Bitcoin. Although I'm not very technical, I've learnt about Bitcoin through study, asking questions, running ecommerce and marketing sites and working as a journalist. I've always loved writing and my current focus is on creating guides which inform others about Bitcoin's advantages.
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57 Comments on "Support for Segwit2x, the New York Agreement, and the Upcoming Bitcoin Fork Explained"

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Korina
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Korina

Thank you, you helped me a lot:-)!

Korina
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Korina

Thank you for quick answer! So you reccomand Electrum Bitcoin Wallet as the safe one?

Lew
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Lew

Hi
Great article
My question would be- will you be funded the equivalent of partial bitcoins? I am looking to get involved but can’t afford a whole one :)
Thanks
Lew

Korina
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Korina

Hi! As I understand Blockchain, Xapo and Jaxx wallets are not recomanded (because they all support SegWit2x). Is MyCellium wallet secure? Thnx in advance! Korina

Fre
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Fre

Hey guys, very clear article thank you. If I transfer my bitcoins to a private wallet, it remains in BTC or will change to S2X I don’t understand. I don’t want to switch to S2X, I want them to remain BTC, the right strategy would be to transfer them to a private wallet (like Mycelium for example)

Rich
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Rich
Hello All. I’ve only come to discover cryptocurrencies some 3 days ago, I am by far more confused than anything else. The more I learn the less I know. Where to start to get a good handle on all the aspects of this monetary system? Woulda coulda shoulda, In 2011 I was considering investing in some BTC. Sadly that is a boat I missed. It is now seemingly unaffordable to the everyday Joe. Any pointers on a good first page to read? And whats the deal with all the different currencies? With so many coins out there.. How long before… Read more »
Ofir Beigel
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Ofir Beigel

Hi Rich, great to have you onboard. My best advice would be to sign up to our beginner’s video crash course and then take it from there. The course will give you a pretty good overview of what Bitcoin is all about and how to use it. You can sign up to the course here: https://99bitcoins.com/get-started

Paul
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Paul
I understand the reasoning behind getting my BTC out of an exchange and into a private wallet, but if I do that, and Segwit2x means that a new altcoin is created (like with Bitcoin Cash), will I then own some of this new coin? And if I do how would I access it? Sorry if these questions seem innocuous I am still fairly new to all this, when Segwit happened my money was in Poloniex and they set me up with a BCH wallet with an equivalent amount of coins in. Basically my fear is that if I put my… Read more »
Yorugua
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Yorugua

I have my BTC in Blockchain.Info, I am not sure about what am I risking for keeping them there.
I am considering, transferring to Ether -I don’t think there are fees involved.
I am considering moving them to Coinbase and sell them.

Do you think it is worth the trouble or -if you were me- would you just keep them in Blockchain.Info?

Sentient
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Sentient

Hi Steven,

Thanks for this article. as a crypto newbie, this was very enlightening. Looking forward to your BTG article. I confused BTG with B2X for a minute there.

Dr.T
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Dr.T

Thanks alot for your last reply sir
by the way it seems there are some big problems with BTG,and some peoples call it KNOWN SCAM,would you please clear your opinion about it?

Ofir Beigel
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Ofir Beigel

I’ve heard about that as well. It will all be cleared up in next week’s post hopefully :)

Jason Csiszar
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Jason Csiszar

Do we know yet a date in November that it might occur? Would it be mid or late November?

Ofir Beigel
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Ofir Beigel

The fork is shceduled to happen on block #494784. Since we don’t know exactly how long it will take to mine a block (on avg. it takes 10 minutes) we can’t say for sure. However you can view a countdown to the activation here:
https://bashco.github.io/2x_Countdown/

Alfredo
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Alfredo

Hi. I’m new. Would a paper wallet be safe during the hardfork? Thanks

Ofir Beigel
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Ofir Beigel

Yes, a paper wallet is a good way to store your coins during a fork

algreen
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algreen
So what exactly will happen to btc funds held in a paper wallet at the time of the forking? I assuming that segwit2x won’t achieve unanimous adoption and this will result in bct splitting into 2 separate currencies and blockchains (similar to what happened during previous fork which created BCC): BCT1 (mined by those who support sewit2) and plain old BCT (mined by those who support the status quo and reject segwit2). So after the fork my current BCT funds will exist at a duplicate address on the BCT1 blockchain (and controlled via the identical private key). Is that correct?… Read more »
Ofir Beigel
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Ofir Beigel

Exactly. Regarding how to withdraw the funds – we will issue a later post about this once this clears out. We’re not yet certain ourselves.

FranklyZephyr
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FranklyZephyr

Hi Ofir – I’m currently placing my coins in Electrum with 2fa – are they safe there for the hard fork and will I also be able to claim the gold? – I’m getting totally focused to be honest haha – The more I look into Bitcoin the more I think that this will never be taken up be your every day Joe. Seems like the fees are actually quite high at times too. We’ll see. Thanks for any help

Ofir Beigel
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Ofir Beigel

Yes, Electrum is a good wallet to keep your coins in

rrjj21
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rrjj21

What exchanges are listing/trading BTG?

Ofir Beigel
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Ofir Beigel

It’s not yet known, we will try to update next week when we write about Bitcoin Gold.

Fred
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Fred

I asked a question RE: BCH ear;ier. I would like some feedback from ADMIN please

alire
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alire

my question is missing from here what happened???

Ofir Beigel
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Ofir Beigel

What was your question? If it had a link in it perhaps it’s awaiting moderation

Fred
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Fred

How will this hard fork in November affect BCH value? it’s been hit pretty hard plummeting down to $300. What advice if any to current BCH holders? Sell low? Or Hold on and hope for a resurgence of BCH?

Ofir Beigel
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Ofir Beigel

Hi Fred, there’s no direct connection between this fork and Bitcoin Cash. That’s why I don’t think there should be any effect on it. We don’t give out investment advice here on 99Bitcoins so I can’t really tell you what you should with your BCH, it basically boils down to how much you believe in this currency.

fffggddfg
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fffggddfg

hello
i have a question,
if I have 1 BTC in bittrex, will I also get equivelant bitcoin gold and SegWit2x
???
like bitcoincash??
thanks

Ofir Beigel
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Ofir Beigel

It depends on how Bittrex will deal with the fork. If you don’t want to be dependant on them make sure to withdraw your Bitcoins from your account into your own wallet before the fork.

Vivek P Nair
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Vivek P Nair

yes, it will be 1:1 split. But the concern is the value of the resulting steams. Unlike the last hard fork, it is quite possible that one steam completely looses value or both loosing value simultaneously. Again, as said in the article above, it is market economy.

Rafael
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Rafael

great article! seg2x is corporations backed altcoin!

Paul
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Paul

Is ‘Blockchain.info’ considered a safe wallet because you have access to your private keys?
I’m very new to this whole revolutionary echnology.
Kindest regards.

Maximillian Laumeister
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Maximillian Laumeister

It’s safer than many other wallets, but you still run the risk (for instance) of their website being hacked and stealing your password as you type it in. I would be comfortable storing small amounts there but not large amounts. For larger amounts I would consider a software wallet (like electrum) on a computer that you know is very secure, or even a hardware or paper wallet.

Paul
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Paul

Hi, Maximillian.
Thank you for your response. Everything you say makes sense to a newbie on a learning curve.
Regards,

Paul.

Ofir Beigel
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Ofir Beigel

Hey Paul, Blockchain.info is kind of a hybrid. On the one hand it lets you view your private keys, on the other hand, it’s an online wallet. Personally I don’t like it as much as other wallets like Electrum or hardware wallets, but it’s a reasonable choice if there’s no other option.

Paul
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Paul

Hi, Ofir.
Thank you for your response. I can only appreciate how busy you are and your opinions and work are always valued. I will look into Electrum and Hard Wallets.
Kindest Regards,

Paul.

Maximillian Laumeister
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Maximillian Laumeister
> Unsubstantiated leaks have circulated of late indicating that some major miners fully intend to redirect their hash rates to S2X These aren’t unsubstantiated leaks, they are facts. 95% of all Bitcoin miners are currently signaling their intention to mine S2X, you can read this figure directly from the Bitcoin blockchain right here: https://coin.dance/blocks Now you can argue that miners will go back on their signaled intention and you may well be right, but anyone saying that more than 5% of miners publicly support NO2X is factually incorrect. > Multiple Core developers are on record as likely to halt all… Read more »
John
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John
Hi Guys, I’ve been looking everywhere for a clear explanation of this pending issue and am very happy to have come across your site and this article. I recently received a Ledger Blue and based on the opinions rendered above, I will diversify my BTC holdings by moving 50% into Ether (in case of a catastrophic event, and Ether is a fairly safe bet), the balance I will store on my Ledger Blue device and sit tight until a consensus is forthcoming on how to proceed in respect to transferring either version of BTC funds… thanks again for the clear… Read more »
Ofir Beigel
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Ofir Beigel

Glad you enjoyed the post and welcome aborad :)

Dr.T
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Dr.T

hi,in 25oct will btcgold available in exchange incs ? like bittrex? do you have any list or info about which or where can i buy bitcoin gold except hodling btc?

thanks

Ofir Beigel
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Member
Ofir Beigel

Bitcoin Gold is a whole different story than Segwit2x. We will issue a post about it soon as well. For now we don’t have any info about it.

DDW
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DDW

Just wondering which wallets are ok to keep BTC in before the fork? Will any do providing one has ownership of the private kets

Ofir Beigel
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Ofir Beigel

Exactly. As long as you have access to your private keys with your wallet you’re good to go.

Tope
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Tope

I see most people selling off alt coins and buying bitcoin. Whats your advise on this?

Ofir Beigel
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Ofir Beigel

It’s a very personal decision. Some believe the price will rise due to the fork and are buying BTC at the moment, others think it will tank and it’s better to get out of the market until the storm clears.
We don’t give out investment advice as a general rule so I won’t be able to help you with that. Personally, I’m holding (aka hodling) for the long term.

xia
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xia

So would you use the hard fork to short-sell bitcoins or will it be too risky because lots of traders will do it?

Ofir Beigel
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Ofir Beigel

You can do that, but no one guarantees that the price will fall necessarily. My personal opinion is to buy and hold since in the long run I believe the price is on an uptrend (not investment advice)

Rob
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Rob

I’ve watched your videos and understand the recommendation for removing coins from exchanges to hardware wallets, but does that make sense in this case? Coinbase will allocate new coins to customers based on BTC present in Coinbase wallets at the time of the split. Wouldn’t it make more sense to just hold tight until after the split and THEN move the coins off-exchange?
Thanks-

Ofir Beigel
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Ofir Beigel

As long as the coins are on the exchange they are out of your control. If Coinbase suddenly decides to do something you’re “not cool” with you won’t have any say in it.
It all boils down to how much control over your money are you willing to give to a 3rd party, and how much do you trust that 3rd party. Coinbase has been known to do some pretty annoying things:
https://99bitcoins.com/coinbase-review-6-controversial-issues/

Morgan Davidson
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Morgan Davidson

Its funny how this all originated from the Big Corp’s having full control over our money, to gaining it back, and then again losing control over it again by the Big Corps who are once again making the decisions as to what it best.

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