The Bitcoin Scaling Agreement was as much a story about technology as Titanic was about a ship.
A crash course in the basics of democracy, economic majority theory and self-determination, the Bitcoin Scaling Agreement, which set in motion the Bitcoin Fork of 1 August 2017, highlighted the growing political and economic considerations that permeate the decentralised system.
As the South African Reserve Bank commences the South African cryptocurrency regulatory experiment with the aim of legitimising and garnering a better understanding of cryptocurrencies/assets, the Bitcoin Scaling Agreement is a reminder that cryptocurrency/assets and decentralised systems have evolved beyond the initial concerns and complexities that fuelled the 2014 regulatory neutrality. We are reminded that the current regulatory experiment faces a host of new complexities and that this industry will continue to evolve beyond any current or future understanding that we may have about it.
The Bitcoin Scaling Agreement
The stalemate Bitcoin scaling debate and the plethora of Bitcoin improvement proposals culminated in a New York meeting of various players within the Bitcoin economy in May 2017 and with that, the Bitcoin Scaling Agreement came into being.
The Bitcoin Scaling Agreement is essentially an undertaking from the various signatories to implement the Segwit2MB Proposal, the first step of which is to activate Segregated Witness at an 80% hashpower threshold which had been reached before the end of May 2017.
- As of May 2017, the signatories of the Bitcoin Scaling Agreement represented:
- 58 companies located in 22 countries
- 83% of hashing power
- 5.1 billion USD monthly on chain transaction volume; and
- 20.5 million Bitcoin wallets.
The signatories of the Bitcoin Scaling Agreement represent the critical mass of both the technical and economic communities within the global bitcoin ecosystem.
Decisions of Decentralised
While the Bitcoin Scaling Agreement was primarily the spark needed to bring about much-needed technical changes to the Bitcoin network, it has taught us two very important lessons (i) how the decentralised network makes decisions and (ii) the where the decision-making power lies.
By Seshree Govender, an Associate at Webber Wentzel