Bitcoins are shaken up by a new system update at the Blockchain level, here's what it means and what we need to do if we own virtual coins
Recently, various updates to the Bitcoin system have been causing cryptocurrency experts and investors to debate. These changes at the Blockchain level have been happening with regularity over time. First there was Bitcoin Cash and then there was Bitcoin Gold. Now it's time for Bitcoin2X, that's what it's all about.
The questions investors ask after a Blockchain-level update are: can I still use my virtual coins? What happens to my "old" Bitcoins? And what will the "new" Bitcoins look like? To answer these questions we need to take a step back and specify that Bitcoins are a cryptocurrency based on a "chain" that we define as the Blockchain. Each transaction is done by adding blocks to this chain. The problem is that each added block can be at most 1MB in size. This limits the amount of transactions that can be placed on each individual block. To solve this problem over time, several solutions have been proposed.
SegWit and SegWit2X
In the beginning, each transaction was split into two parts, so as to take up less space within the chain. With the proposal known as SegWit within each block of the chain it was possible to fit more transactions. Later, after a new proposal known as SegWit2X, each block for Bitcoin transitions was increased from 1MB to 2MB. However, this choice brought to a modification of the Blockchain, an update necessary to support blocks doubled in space.
One of the main problems of the new modification is the cyber security of each transaction. In fact, it can happen that the so-called replay effect occurs, that is, a transaction is "duplicated" on the chain. This causes a Bitcoin to be used twice even though there is only one coin. The main problem is that the Bitcoin2X update does not have any particular defenses against the replay effect and this is the reason why many investors are abandoning this system in recent times. The experts' advice is to continue investing in Bitcoin and if we have our own wallet with virtual coins we will have to be patient and maybe avoid making payments or trades on November 17, 2017 or in the days immediately following. In this period in fact choices will be made regarding the new Bitcoin2X update on the blockchain.