Understanding SegWit2X & Replay Attacks

in #bitcoin7 years ago

Segwit2X hard fork will occur in about a month.
This is the hard fork that most of the Bitcoin community is unenthusiastically waiting for.

So if you’ve been wondering what’s the big deal about it, let’s take a look at SegWit2X.

This is an attempt to address the scaling issues currently plaguing Bitcoin by increasing the size or more specifically, the weight of the blocks of the Bitcoin blockchain.
The reason this change can only be implemented as a hard fork is due to the fact that this change requires the legacy nodes to upgrade.
You can think of legacy nodes as the original nodes of the bitcoin blockchain that have never upgraded.
This means they follow the original protocols set in place when Bitcoin was first created.
SegWit2X would require these nodes to accept blocks that they otherwise would have rejected prior to the hard fork.
Because this change would ultimately increase what is being called the weight of a block, this in turn increases the workload for the nodes of the Bitcoin Network. It will also affect the miners.
(I’ll include links down below that go much more in depth on how exactly the nodes and miners will be effected so you can get a better idea of how this hard fork will change things.)

This may sound like a simple and logical move to help the network deal with the increase of transactions, but it’s important to note that like everything else involving Bitcoin things get technical and philosophical.
There is a very important issue with SegWit2X that I think everyone who uses Bitcoin needs to be aware of, and that is the threat of replay attacks.

If a hard fork occurs and neither the new or original blockchain implement protocols and protect against replay attacks, things can go south.
When a blockchain splits, the original blockchain or legacy blockchain and all of its past transactions are the same on the newly split blockchain. This is why we are able to receive an equal amount of the newly created coin if we were holding the original coin at the time of the split.

At the time of the split however, if there is no replay protection protocol implemented by either the legacy blockchain, or the new one, new transactions that occur on either chain could be copied and sent on the other chain. This would cause anyone sending BTC or the new hard forked coin to accidentally send both coins to a lucky recipient.

This also opens the door for malicious actors to receive both coins when the intention was to send only one.
Enter: Replay Protection- a protocol that ensures that new transactions are valid on one blockchain and not the other.
It’s true that either the original blockchain or the newly formed blockchain can implement this replay protection to prevent this type of double spending.
However it would be much easier for the new blockchain to implement this security. This is because the original Bitcoin blockchain network is so widely spread the likelihood that this security protocol would be implemented in time is very slim.

This can be quite confusing to understand so you can find links down below for additional articles and blog posts that go much more into detail on how exactly this hard fork will effect the blocks and how replay attacks happen and how they can be prevented.

Additional Reading/Sources:
Explaining SegWit2X Replay attacks

More on block size vs block weight

Basic Layout of SegWit2X

List of supporters for SegWit2X (includes exchanges and wallets)

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wow; wonderful explanation, I definitely learned ab it; the replay protection is quite an important piece.

I wrote about recent forks in my article on segwit2x yesterday as well.

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