After years of acrimonious debate, it finally happened: Bitcoin experienced a hard fork. The new chain — “Bitcoin Cash” — is an attempted resolution to the long-simmering Bitcoin scalability debate. Essentially, Bitcoin Cash cloned Bitcoin, with a couple of significant changes: (1) an 8MB blocksize limit, up from 1MB; and (2) no Segwit, which was recently implemented in the main Bitcoin network. This has resulted in two distinct Bitcoin blockchains, which share the same history up until block 478558 (which was mined on August 1), but thereafter go their separate ways, with different rules to follow.

Note: in this article, for simplicity’s sake, I will refer to one Bitcoin chain as “Bitcoin Segwit” and the other as “Bitcoin Cash.” This isn’t meant to preference one chain over another, and I agree with Gavin Andresen who argues that the chain with the greatest hash power (which is currently the Bitcoin Segwit chain) should in general be referred to as “Bitcoin.” But for clarity they need to be distinguished in this article.

The fork has brought up a lot of questions. Will Bitcoin Cash succeed? If so, can the market sustain two Bitcoins, or would the success of Bitcoin Cash mean Bitcoin Segwit’s demise? And if there can be two Bitcoins, how about three, or four, or more? What is the future of Bitcoin(s)?

The Path to a Fork

A quick review of the main sides in the Bitcoin scaling debate. On the one hand, you have what I’ll call “Bitcoin Core” or just “Core,” which consists of many Bitcoin core developers and their supporters. The leaders of this side include Greg Maxwell, Adam Back, and Luke Dashjr, with Theymos, the owner of the main Bitcoin-related channels of communication, as the online enforcer of their views. Bitcoin Core has made it clear that it strongly opposes a blocksize increase. Instead, its scalability answer involves off-chain solutions such as Lightning Network. Core also supports adding Segwit, as it reduces the size of transactions (effectively increasing how many transactions a block can hold), and is also necessary for the implementation of Lightning. Core believes an increase in the blocksize would lead to a centralization of nodes, which would be contrary to the decentralized ethos of cryptocurrency.

On the other side of the scaling debate are those who believe the best way to scale Bitcoin is to increase the blocksize limit, the “big blockers,” lead primarily by Roger Ver and Jihan Wu. They do not believe a larger blocksize will lead to centralization, predicting that advances in technology will allow a diversity of people to run nodes to support the network. They also believe that restricting the blocksize to 1MB prevents Bitcoin from becoming the “electronic peer-to-peer cash system” that Satoshi Nakamoto originally envisioned.

Although the debate is more complex than I’ve indicated, the battle eventually came down to Segwit vs. blocksize increase. Core unsuccessfully tried to get Segwit implemented, and big block proponents were equally unsuccessful in gaining enough support for a blocksize increase. It appeared a perpetual impasse would ensue.

However, at the May Consensus 2017 conference in New York, a group of industry leaders came together with a compromise: Segwit2x, or the “New York Agreement.” This compromise resolved to implement Segwit if 80% of miners signaled for it (instead of the 95% that Core unsuccessfully attempted). Further, it would also implement a blocksize increase to 2MB within six months (i.e. November). It was an attempt to bring together warring factions for the good of Bitcoin.

And, at least initially, the New York Agreement appeared to be a success. By the end of July Segwit signaling exceeded 80% and was locked in, which means that the Bitcoin Segwit chain will soon support Segwit. The next step in the Agreement is an upgrade to 2MB blocks in November.

Yet a group of big-block proponents forked Bitcoin Cash anyway. Why? Essentially, they did not want Segwit implemented and also believed that a 2MB blocksize either would not happen in November or was too little, too late even if it did. So they created a new chain, called Bitcoin Cash, which brings us to today: two concurrent Bitcoin chains.

A Fork in the Road Leads to…Another Fork?

If the Bitcoin Segwit chain does implement 2MB blocks in November, as the New York Agreement calls for, many believe there is no real purpose for Bitcoin Cash. After all, such an upgrade will demonstrate that a hard-fork blocksize increase is possible on that chain. And if the November increase happens as planned, perhaps Bitcoin Cash will fade to a footnote in cryptocurrency history. But will it happen?

Probably not.

Bitcoin Core has consistently opposed larger blocks, and it appears Core is still opposed to them. For example, Adam Back has recently said that he’d prefer not to hard-fork in November but instead focus on Segwit and Lightning Network. Another Core developer, Luke Dashjr, has stated unequivocally that “Segwit2x is not going to happen.” In fact, a new release of Bitcoin Core (version 0.15.0) will actively disconnect nodes that signal for the Segwit2x fork. Clearly Core used the New York Agreement simply as a means to implement Segwit; it had no intention to support a later blocksize increase.

So what happens if Core refuses to implement a blocksize increase in November?

Erik Voorhees, Barry Silbert, and Jeff Garzik and other supporters of Segwit2x will have three choices. They can (1) abandon the proposed blocksize increase and stay with Core; (2) implement the 2MB blocksize increase anyway, thus forking away from Bitcoin Core’s implementation (creating a third Bitcoin chain); or (3) abandon Bitcoin Segwit and back Bitcoin Cash.

If Segwit2x supporters abandon the 2MB blocksize, they have effectively conceded defeat to Bitcoin Core’s “no blocksize increase ever” vision. This could, perhaps paradoxically, strengthen both Bitcoin Segwit and Bitcoin Cash. For it will mean that users of Bitcoin will have a clear choice: off-chain or on-chain scaling. But of course Bitcoin Segwit gets the biggest boost in this scenario, as the New York Agreement will essentially do what Bitcoin Core wanted all along.

If, instead, Segwit2x supporters decide to move ahead and fork away from Bitcoin Segwit by increasing the blocksize limit, we’ll have three separate Bitcoin chains: Bitcoin Segwit, Bitcoin Segwit2x, and Bitcoin Cash. It’s hard to image a scenario where all three chains survive, or a scenario in which this confusion doesn’t reduce overall confidence in Bitcoin itself among the masses.

Finally, if Segwit2x supporters flock to Bitcoin Cash, then like the first option, both Bitcoin Segwit and Bitcoin Cash are strengthened, but in this case Bitcoin Cash is strengthened more than Bitcoin Segwit. Again, however, a clear choice will be available in the ecosystem.

An Unclear Path Forward

Who will win in the end? It’s important to remember that Bitcoin Segwit has an incredible network effect behind it. Exchanges, merchants, miners, and consumers — which mostly use the Bitcoin Core implementation — are already configured for it, and Bitcoin Cash or any other new chain will need to have to create a similarly extensive ecosystem in order to succeed long term. So Bitcoin Segwit has the built-in advantage. But Bitcoin Segwit still has to prove that its proposed solution to scaling — Segwit plus Lightning Network — is feasible and can truly operate as a global payments network. If Lightning fails or is delayed indefinitely, then Bitcoin Cash or another big-block chain is primed to step in and capture a large segment of the market.

There is another possibility, of course. The in-fighting and forks could cause a loss of confidence in Bitcoin itself, leading to an exodus of merchants and users to an altcoin such as Dash or Ethereum. We’ve already seen Bitcoin’s share of the cryptocurrency market drop from almost 90% to under 50% this year; a further, even more precipitous, drop could occur after November. Ultimately, the market is not ideological: it will support whatever works best, no matter its name. As we approach November, all those interested in cryptocurrencies — from the most ardent Bitcoin maximalists to altcoin zealots — will be watching closely to see if we have one, two, or three Bitcoins.