Xapo will finally integrate SegWit after the hard fork of SegWit2x has been canceled by top supporters, including Blockchain, BitGo, ShapeShift and its main developer, Jeff Garzik.
But Xapo president Ted Rogers warned the industry and the bitcoin community that some of the largest bitcoin companies in the market may move to more flexible and supposedly scalable cryptocurrencies, such as Bitcoin Cash or Ethereum, pushing millions of users and large volumes of transactions with them.
It’s my guess [the] biggest [bitcoin] companies are gearing up to switch to Bitcoin Cash or Ethereum, and it will take millions of users and transactions with them. They will still support bitcoin, but it will not be a focus for their future. Xapo only supports bitcoin so far and will implement SegWit, but will not waste its time pressing others.
\Possibility of companies moving to Bitcoin Cash and Ethereum
Top bitcoin companies like Xapo, Blockchain and Coinbase expect good solutions related to SegWit and second layer solutions such as the Lightning Network and find that it is not the right approach to force companies to adopt specific software to scale their platforms. Most importantly, many of the companies that support SegWit2x have firmly stated that the burden of transaction fees should not be placed on users.
In the coming months, if bitcoin transaction rates still remain high even with SegWit, Rogers emphasized that companies can switch to Bitcoin Cash and Ethereum by considering their cheaper transactions and larger blockchains that can handle increased transaction capacity . At the moment, the blockquain of Ethereum processes twice the daily volume of transactions of bitcoin, around 550 thousand transactions per day.
Wences Casares, CEO of Xapo, added that while high transaction rates are more profitable for the business, the company expects to see some scaling results in the blockchain for its users.
Where will Bitcoin’s scale solutions go from here
Ultimately, this boils down to a communication problem between the companies that support SegWit2x and those that support Core. The Bitcoin Core development team, along with the community, does not seem to be fundamentally opposed to some on-chain scales. But according to the NYA agreement and the Hong Kong agreement, which was established in 2016, they expect companies to adopt SegWit first, see how the software performs, and then continue to scale the chain or some solution in second layer.