UASF Deadline Approaches Creating Market Tension
As the August 1 BIP148 UASF deadline draws closer, market participants increasingly focus on potential fork scenarios and outcomes.
By June 26, 2017, with the August 1 BIP148 User Activated Soft Fork deadline just five weeks away, market tension was building as participants anticipated potential fork scenarios and their implications. The three main possibilities being discussed were: UASF successfully forcing SegWit activation with most economic activity and hashpower following the UASF chain; a chain split where both UASF and non-UASF chains survived as separate cryptocurrencies; or the SegWit2x compromise activating SegWit before August 1 and making UASF unnecessary.
Each scenario had different implications for Bitcoin's price, usability, and governance, and participants were positioning themselves accordingly.
The approaching deadline forced concrete decision-making from all ecosystem participants who could no longer avoid taking positions on which chain they would support in various scenarios. This was causing significant behind-the-scenes negotiations as businesses, miners, and developers tried to find compromise solutions that would prevent a contentious split.
The SegWit2x proposal was gaining support as a way to satisfy both SegWit advocates and big block supporters by activating SegWit immediately while committing to a block size increase to 2MB within six months. However, many UASF supporters viewed SegWit2x as an inadequate compromise that gave too much power to miners, while Bitcoin Core developers objected to the hard fork component.
The market tension was reflected in price volatility and in the extensive contingency planning being undertaken by exchanges, wallet providers, and businesses.The next five weeks would be among the most consequential and dramatic in Bitcoin's history, with the potential for outcomes ranging from smooth technical upgrade to catastrophic chain split.