In the past couple of days, Bitcoin value has shot up to nearly 28% in reaction to the much feared cryptocurrency split being averted. On July 20, the value had touched $3,000, which is a tremendous increase in value and it indicates the powerful influence of the impending August 1 SegWit activation.
Earlier in the week, miners gave the nod for BIP91 solution, which carries a middle line between SegWit and SegWit2x (Silbert Accord) by Digital Currency Organization.
Taking into account that technical instability was a challenging issue with BIP91, it still became an option of last resort for the Bitcoin community to avoid the network split, resulting in two different Bitcoins and Bitcoin Blockchains.
How does this new turn of events affect users looking to trade their bitcoins at CEX.IO?
Is the exchange ready to meet the challenge of SegWit activation?
Before going into the semantics, let us first look at how BIP 91 came about in the wake of SegWit and SegWit2x.
Why SegWit and BIP 91 happened?
Bitcoin has reached a stage where an upgrade is vital. The limited transactions due to small sized blockchain led to higher fees and slower confirmation times. SegWit is a soft fork scaling solution that aims at larger transaction volume with benefits like higher multi signature transaction security, linear scaling in sighash operations, versioning of script and much more.
The scaling solution hit a wall when it came to fixing transaction malleability. The bug fixes introduced to ensure secure transactions led to the miners’ fees being deflected to the payment channels. As a result, this encouraged the opposition to SegWit proposals including BIP141 and later BIP148.
The miners responded with BIP91, which is developed by James Hilliard an engineer at Bitmain Warranty. BIP91 is fully in accord with the New York Agreement and earns support from several mining pools and bitcoin companies. Its compatibility with BIP148 is another plus. BIP91 is a miner-activated soft fork and locks in at a threshold level of 80 percent in contrast to 95 percent required from mining hash power. This level surpassed to 83.3 percent on July 18 resulting in the nod for BIP 91 activation by mining pools like BTCC, Bitfury, Antpool and more.
What activation means for CEX.IO users?
SegWit activation will cause optimization of 75% of the Bitcoin blocks and reduction in transaction fees. The bitcoin scalability and SegWit benefits have caused prices surging to nearly $3,000 in just a week.
CEX.IO being one of the trusted and safe bitcoin exchanges functioning since 2013, is well-equipped to deal with the outcome of SegWit activation, whether or not the split happens. It has all mechanisms geared up to support any fork the market chooses, even if the coin split goes ahead including generation of new wallets and keys.
August 1 activation and its impact
SegWit activation on August 1st is a highly anticipated event by the bitcoin community and users looking to safeguard their investments. When a split was considered a possibility users and the bitcoin community went into tailspin.
The repercussions of a split could result in a huge drop in the value of bitcoin and higher transaction fees. Many leading wallet services including Blockchain are requesting a fee amount of 90 satoshis/byte in case of transactions of medium size. This amounts to a range of $0.5 -$0.9. Earlier this year the bitcoin fees were more than $5.
With the good news of split being avoided, bitcoin trade is all set to increase to new heights and CEX.IO is well prepared for it. If everything happens smoothly by middle of November a newer Bitcoin version will be in place with more transactions occurring in a block and less transaction fees. And this successful upgrade signals the development of more such software upgrades that can make bitcoins more stable, standardized and widely accepted than now.
CEX.IO users are on the safe side
CEX.IO exchange is one of the fastest and allows users to trade in fiat currencies (Euro, British pound and US dollar) and Bitcoins. The flat fee of 0.2% for trade, sell or buy transactions is a low one when you look at the bitcoin price. The exchange does not levy fees for bank transfers but you have to pay for card payments.
With the exchange involving 400,000 active traders over a 30-day span, the users have more opportunity to increase their profits with the exchange. With a huge bitcoin exchange like CEX.IO, which has solid security measures and well optimized software to meet user needs the imminent SegWit activation will actually give the users an upper hand. The activation without a split is a much anticipated one which will enable transactions to be more efficient and also profitable.
Transactions will go ahead as usual
While trading may be halted for some time before the activation, the bitcoin exchange will provide instant notification to the users on the events and keep them updated. In spite of the split not happening there could be fluctuations in bitcoin value before August 1st and after it. The users need not fret as the exchange will continue its operations.
Since Bitcoin is a fairly new and innovative software model there is still much uncertainty over its acceptance. Just as any new technology, Bitcoin will also undergo several tweaks in future to make it a more robust model. With SegWit proposal getting the approval now, investing in Bitcoin is certainly looking more and more profitable and a better one while trading at CEX.IO.
However volatility is a given thing in this market considering the huge difference in the value in the past week alone. This state of affairs is set to continue in the following weeks until the activation is completed successfully. CEX.IO will disable the withdrawals and deposits 12 hours prior to August 1, 2017, but once SegWit activation is confirmed the exchange will be back to its peak form enabling the users to make fast and secure transactions as before.