A note on decentralization and bitcoin

Today, we’d like to announce our support for BIP148, more commonly known as a User-Activated Soft Fork to implement Segregated Witness.

Blockonomics was founded back in 2014, and we have always aimed to provide completely free peer-to-peer services to the bitcoin community. We believe that decentralization is key to bitcoin, and this has been the core of our services. Peer-to-peer encrypted invoices, transaction receipts, sending bitcoin via email; all of our features require no trust at all.

Over the past few years, we have seen many individuals come up with different ways to scale bitcoin and help increase adoption. These implementations include Bitcoin XT, Bitcoin Classic, and more recently, Bitcoin Unlimited.

While we believe that the majority of the bitcoin community wish to see bitcoin thrive and succeed, it has recently come to our attention that some members are solely interested in their personal benefit, and seem to have no intention of helping improve bitcoin at all. In our opinion, these parties are actively working against decentralization, and they are trying to seize control of bitcoin.

It is a fact that bitcoin must be scaled appropriately to achieve widespread adoption; the current system simply cannot process the number of transactions required for this. After much consideration and investigation, we have come to the conclusion that Segregated Witness is currently the best, most stable and most reliable scaling solution available.

Segregated Witness solves a number of problems that Bitcoin is currently facing. This isn’t just limited to block size and transactions per second; it also fixes transaction malleability, and will allow for other off-chain scaling solutions. This means that the lightning network can also be deployed easily, which would be a great step forward for widespread adoption and everyday transactions. SegWit is also tested and stable, unlike some other implementations.

Unfortunately, we have observed that it is quite improbable for SegWit to reach the 95% activation threshold before the end of its signalling period. Therefore, we believe that the best way that SegWit could be implemented is through a User Activated Soft Fork.

We understand that this implementation isn’t supported by everyone, but we still believe that it is the best path forward. Blockonomics is completely prepared to support a UASF, and our services are prepared to work with SegWit blocks.