SegWit is a movement among bitcoin miners to increase the block size from 1 MB to 2 MB (Megabytes). SegWit can be activated by the bitcoin miners collectively by the highest ratio of miners “voting” for it.
In addition to raising the blocksize, SegWit will also enable platforms to be built on top of the bitcoin network, giving it some of the malleability of the Ethereum network. The Bitcoin Lightning Network seeks to make transactions faster and more scalable on the blockchain, but will require SegWit to be activated by the miners. 95% of the miners must ‘signal’ their vote for Segwit in order to activate it. As it stands, many miners are not signaling for SegWit activation – perhaps due to the change SegWit could bring to the ecosystem or due to the potential loss of profit from easier transaction transfers (and lower transaction fees).
UASF / BIP 148 is a blockchain user movement to change the bitcoin core code to deny blocks not signaling for SegWit. If all goes well, 100 block confirmations after BIP 148 implementation, SegWit will be force-activated on the bitcoin network. The force activation take place by bitcoin nodes and users signaling their support for BIP 148 and rejecting mined bitcoins without SegWit support. By activating via the nodes of the blockchain network (rather than the miners themselves activating it) the benefits of SegWit are brought to the blockchain without the need for 95% of miner support. Blockchain miners can also force this upgrade with 51% signaling support for BIP 148.
The problem: Before that 100th block is confirmed on the blockchain, there is a potential for the blockchain to diverge into two. With transactions and mining taking place separately on each blockchain two coins will be born out of one, akin to ethereum and ethereum classic.
According to reddit user luke-jr, we can avoid a chain split by:
- 95% of hashrate locks-in segwit before August 1st. No chain split at all.
- 51% of hashrate deploys BIP148 before August 1st. No chain split at all.
- 51% of hashrate deploys BIP148 after August 1st. Chain split gets resolved.
- Legacy miners are compelled by the economy to switch to BIP148 after Aug 1st. Chain split gets resolved.
It’s recommended to keep your coins in your own offline wallet during the change or to confirm with your online wallet their plans with your coins in the event of a split.