Bitcoin Price Hits $2,150 Following Rapid Progress in SegWit, Scaling Talks

Sources of Coin telegraph, as well as others including Bitcoin investor Alistair Milne, suggested that Bitcoin miners have agreed to activate the Bitcoin Core development team’s transaction malleability fix Segregated Witness (SegWit).

Although the consensus among miners to activate SegWit is only a rumor as of current and is not confirmed, the Bitcoin community seems to be anticipating the activation of SegWit and the execution of a two MB hard fork as a compromise.

2MB hard fork agreement

On February 20, the Bitcoin Core development team, miners and businesses participated in the Hong Kong Bitcoin Round table Consensus to come to an agreement in regard to a scaling solution for the Bitcoin network. In consideration of the rising fee market, increase in the number of daily transactions, mem pool size and block size, miners, developers and businesses agreed to a two MB hard fork.

At the time, Bitcoin Core developers and miners released a statement which read:

“This hard-fork is expected to include features which are currently being discussed within technical communities, including an increase in the non-witness data to be around two MB, with the total size no more than four MB, and will only be adopted with broad support across the entire Bitcoin community.”

One of the unresolved issues between the Bitcoin Core development team and miners has always been the disregard for the two MB hard fork agreement established at the Hong Kong Bitcoin Round table Consensus in February. In order to resolve this conflict, some have previously suggested a compromise which entails the activation of SegWit in return for a two MB hard fork to expand the current Bitcoin block size by 100 percent.

Consensus discussions

On May 22, former BTCC executive and Block stream chief strategy officer Samson Mow quoted Milne’s summation of the discussions conducted at the New York Consensus event to express his optimism toward the idea of activating SegWit first and leading a two MB hard fork execution within a year. Mow said:

As Block stack’s Ryan Shea stated in the past, SegWit is like a Swiss army knife of a solution. It fixes transaction malleability and thus provides a robust infrastructure for two-layer solutions such as Lightning, offers 75 percent optimization of Bitcoin block among other many benefits.

Hence, the plan to activate SegWit to optimize Bitcoin and executing a two MB hard fork a year after to efficiently and securely scale the Bitcoin network is practical and viable.The mixture of high anticipation toward SegWit adoption, rising global awareness of Bitcoin and the increase in the interest of institutional investors in Bitcoin are acting as the three major driving factors of Bitcoin price at the moment.

As of today, Bitcoin price stabilized at the $2,150 margin, after reaching its new all-time high at $2,160 earlier in the morning.

Expected to surge

If SegWit talks continue to develop and if the solution will, in fact, be activated in September as the rumors suggest, Bitcoin price is expected to surge in the short and mid-term. Most traders and experts including Mow have predicted Bitcoin price to surpass and stabilize at the $2,000 region in 2017.

The activation of a scaling solution could also potentially push Bitcoin price to $3,500, as mentioned by Zebpay co-founder Sandeep Goenka.

He said:

“Since the supply is limited and demand is increasing, prices are moving upwards and touching all time highs almost every year. Bitcoins represent a new investment category called digital assets. This industry is exploding in usage and innovation. We believe this is just the beginning.”