Did you ever realize that the word upgrade has a counterpart, downgrade, but the word update has no counterpart downdate? Because progress only goes forward ...right?
The Bitcoin network has remained backwards compatible ever since Bitcoin's release on January 3, 2009.1 This is despite numerous attempts to fork the chain. This great feat of Bitcoin is recognized by many, segwit users included. But segwit nodes, while having maintained backwards compatibility, have also introduced new rules into the system. The real bitcoin does not recognize these new rules. What are the consequences of this, and how will any future fork wars play out? I foresee three possible outcomes.
The 1st possible outcome is the status quo is maintained, meaning that all future blocks in the current chain remain compatible with both segwit and trb nodes. Segwit coins and trb coins remain with their expected owners and the two networks coexist in symbiotic fashion.
The 2nd possible outcome is that at some point in the future a segwit-incompatible block is mined where the miner snags a segwit user's coin. At this moment we fork into two chains, trb-chain (with height h+1) and segwit-chain (with height h). Segwit nodes see trb-chain as invalid, and thus remain on segwit-chain. Trb nodes see both chains as valid, but switch to trb-chain owing to its greater height. If the trb-chain grows faster than the segwit-chain, the fork persists. If the segwit-chain manages to catch up and surpass the trb-chain, trb-nodes will reorg and adopt segwit-chain, putting us back in a post-hiccup version of outcome 1.2
The 3rd possible outcome is trb becomes economically irrelevant. Perhaps the segwit users/bitcoin core team manage to pull off a hard fork that wins in the market place, or trb nodes all go offline. Revisionist history wins, and the roots of Bitcoin fade away into the cosmos.
Given the information I have, all three of these scenarios seem equally likely. The first is the status quo, but it is in an unstable state while both trb and segwit nodes are online. The second scenario can happen at any moment, but it requires the active move of a miner, and it may require a coordinated effort of 51% of the hashing power. The third scenario is the ultimate objective of the enemy, and thus may come to fruition despite its negative consequence for everyone using bitcoin.
No matter how things play out, the best decision today is to move your coins out of "3" and "bc1" addresses and into a p2pkh address aka "1" address. Why would you put all your bitcoins at risk? To save a couple of mbtc on transaction fees?
- The first block with height 0 is hard coded into trb and is dated Jan 3, 2009. The second block, which is the first block not included in the source code, was mined on January 10, 2009. [↩]
- History has shown that miners like to SPV mine. This means they sometimes forego validating transactions in blocks mined by other pools in order to get a slight head start in mining the next block. So if the segwit mining cartel does not validate its blocks, it is possible that a solo miner could throw a wrench into the segwit system by mining just one non-segwit-compliant block. [↩]









