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Bitcoin 2017: SegWit, the Blocksize Wars and CME Futures

UASF BIP-148, SegWit activation at block 481,824, the Bitcoin Cash fork and the CME futures debut.

The block size debate

Bitcoin's 1 MB block limit, added by Satoshi in 2010, became a bottleneck by 2015. Proposals such as Bitcoin XT and Bitcoin Classic sought larger blocks, while Bitcoin Core developers favored Segregated Witness, which moves signature data outside the legacy size calculation.

The New York Agreement and UASF

In May 2017 a group of companies signed the New York Agreement for SegWit plus a 2 MB hard fork. Meanwhile users promoted BIP148, a user-activated soft fork. Miners signaled via BIP91, and SegWit locked in and activated at block 481,824 on August 24, 2017.

Bitcoin Cash splits off

Big-block supporters forked at block 478,558 on August 1, 2017, creating Bitcoin Cash with an 8 MB limit. The SegWit2x hard fork was called off in November 2017, ending the conflict on Bitcoin itself.

The rally

BTC started 2017 near $1,000 and reached about $19,700 on December 17, 2017. CME launched bitcoin futures on December 17 and Cboe a week earlier. Fees peaked above $50 per transaction in December as mempool backlogs grew.

Weight units

SegWit introduced block weight: non-witness bytes count four weight units and witness bytes one, with a 4 million weight limit. A transaction's virtual size is weight divided by four, which is why fee estimates are quoted in sats per vbyte.

By the numbers

For Bitcoin 2017, the reference figures are segwit activation of Block 481,824 (Aug 24, 2017), bitcoin cash fork of August 1, 2017, cme futures launch of December 17, 2017, 2017 high of ~$19,700. The comparison table below lines up event, block / date — Bitcoin Cash fork: 478,558 / Aug 1, 2017; SegWit activation: 481,824 / Aug 24, 2017; SegWit2x cancelled: Nov 8, 2017; BTC all-time high: ~$19,700 / Dec 17, 2017.

Modeling Bitcoin 2017 with the Crypto Profit Loss Calculator

The Crypto Profit Loss Calculator takes three inputs — Buy price ($), Sell price ($), Amount invested ($). P/L = invested × (sell ÷ buy − 1). With its default inputs (Buy price ($) = 100; Sell price ($) = 150; Amount invested ($) = 1000) it returns 500 $; swap in the figures from Bitcoin 2017 above to reproduce the scenario yourself.

Modeling Bitcoin 2017 with the Bitcoin UTXO Consolidation Vbyte Fee Estimator

The Bitcoin UTXO Consolidation Vbyte Fee Estimator takes three inputs — Inputs, Outputs, Fee rate (sat/vB). vBytes ≈ 10.5 + 68·in + 31·out; fee = vB × rate. With its default inputs (Inputs = 20; Outputs = 1; Fee rate (sat/vB) = 10) it returns 14,015 sats; swap in the figures from Bitcoin 2017 above to reproduce the scenario yourself.

Data Table

For educational and informational purposes only. Not financial, investment, tax or legal advice. Figures are approximate and historical; crypto assets are volatile and you may lose capital. Do your own research.