What is a user-activated soft fork (UASF)?

The acronym UASF stands for User Activated Soft Fork. A UASF is a mechanism by which a soft fork is enforced on a specified date, set by the network’s full nodes. The concept requires substantial industry support and coordination, hence it is also described as the economic majority model.

There are two main types of code modification: soft forks and hard forks. The former is a “soft” change; the latter a “hard” one. With a soft fork, the change of rules does not require all clients (software) to upgrade to remain compatible with the new rules. If nodes in the network do not adopt the new rules, they can still interoperate with nodes that do. ForkLog has covered this in more detail previously.

The key difference is that significant code changes are usually activated via MASF (Miner Activated Soft Fork), a mechanism in which a majority of miners signal readiness for the upgrade.

In March 2017 the user-activated soft fork concept was combined with activating Segregated Witness (SegWit), a Bitcoin protocol upgrade aimed at optimising block capacity. It lays the groundwork for future scaling solutions. The proposal is known as BIP 148.

The SegWit soft fork (BIP 9), included in the Bitcoin Core codebase, faced a hurdle: it could be locked in and activated only with 95% of miners’ hash power signalling support. Owing to competing visions for Bitcoin’s development, a portion of miners with substantial hash power successfully blocked activation. At the same time, a large part of the industry — including payment processors, wallet providers and miners — believed activating SegWit was the correct course.

BIP 148 can be described as a non-standard UASF: it is intended to trigger SegWit activation in existing software but, beyond full-node operators’ efforts, also requires miners’ participation. The unusual aspect is that nodes typically begin enforcement on a pre-set flag day. However, more than 80% of the network had already upgraded node software, signalling support for SegWit.

From 1 August 2017, miners must signal readiness for SegWit by creating blocks with version bit 1. This will cause all SegWit-active nodes to begin enforcing the protocol.

As noted above, BIP 148 requires support from the economic majority, especially exchanges and wallets. Otherwise, node software with BIP 148 support should not be run after 1 August, as this would lead to a chain split, resulting in BIP 148 being abandoned. At the same time, there are strong economic incentives for nodes to interoperate and remain in consensus to prevent a split.

If the economic majority as of 1 August signals support for BIP 148, miners will have strong incentives to adopt it. Otherwise, the economic majority will reject their blocks, and miners would in effect be producing an altcoin not recognised by users or exchanges.

• If miners activate SegWit before 1 August, BIP 148 will not apply. All users will remain on the same chain, regardless of the client they use.

• If miners do not activate SegWit, a chain split may occur, with different users seeing different sets of transactions.

• If a majority of miners adopts BIP 148, any split will be temporary; eventually all clients will see one chain, and SegWit will be activated for all SegWit-compatible clients (Bitcoin Core 0.13.1 and above).

• If a majority of miners does not adopt BIP 148, users who accept BIP 148 and those who do not will diverge.

• If a majority of miners starts supporting BIP 148 after 1 August, the chain not following BIP 148 rules may later be reorganised, while the BIP 148 chain gains more support and becomes dominant. In that case, users running a BIP 148 client can be confident, but users on legacy clients may face a “rewrite of history” and ultimately lose all funds.

Data as of 1 June 2017

Miners: Bitfury, Bitcoin India, LightningASIC, Slush Pool.

Wallets: Electrum (ready), Samourai Wallet, Coinkite, Coinomi, GreenAddress, Ledger Wallet, Trezor (ready), Mycelium.

Exchanges and financial services: Abra, Bitfinex, Vaultoro, Prasos, Bylls, MojBitcoin, Bittylicious, Satoshi Counter.

Other companies and services: Bitcoin Embassy, BitCoinReminder, BitKong, Bitrefill, Microsoft, Stampery, Walltime.