The Block Size War was a debate that took place between 2015 and 2017 over the block size of the Bitcoin blockchain.
Dubbed Bitcoin’s first major “civil war,” the debate divided the Bitcoin crypto community and two camps emerged. The big blockers want to increase the block size for cheaper and faster transactions, and the small blockers want to keep the 1 MB limit in perpetuity to prioritize the integrity and security of Bitcoin.
1 background
In the Bitcoin network, transaction data is divided into a series of blocks, and Satoshi Nakamoto added an explicit 1 MB size limit to each block. When Bitcoin was first launched, the currency had almost no value and only a small group of people were mining the new currency. The block size limit did not initially impact the network. Since Satoshi Nakamoto never publicly stated why the 1 MB block size limit was added, many speculated that it was to keep the blockchain small and prevent a large number of spam transactions.
However, as Bitcoin gained popularity and transaction volume increased, blocks began to fill up and the 1 MB size limit began to show some problems. Limiting the size of Bitcoin blocks means that the number of transactions that can be confirmed on the network is limited. A debate began to emerge in the Bitcoin community: some believed that increasing the block size limit was the solution, while others worried that doing so would lead to centralization and security issues for the network. These debates have divided the Bitcoin community into two camps: big blockers and small blockers.
2 Big Blockers and Small Blockers
The big blockers want to modify the original Bitcoin protocol to increase block capacity and handle more transactions. They believe that cheaper and faster transactions will make Bitcoin more scalable. While increasing the block size may not be a permanent solution, some believe it will help keep transactions cheaper in the short term and allow more time for the development of potential scaling solutions.
Small blockers want to maintain the 1 MB size limit to prioritize Bitcoin’s fundamental principles of security and decentralization. Small blockers believe that if the block size increases, it will make it more expensive for ordinary users to run a Bitcoin node. This would lead to companies hosting nodes in data centers, which could harm the decentralization of the network. They believe in the resilience of the system and take a long-term approach to increasing Bitcoin’s market share.
3 Solutions to increase block size
Bitcoin XT
Bitcoin XT is the first solution launched by the big block players. It proposes increasing the block limit from 1 MB to 8 MB, then doubling it every two years until reaching a maximum size of 8 GB in 2036. These changes are incompatible with existing Bitcoin nodes, so the solution requires a hard fork, defined as a change to the protocol that is not backwards compatible. Anyone running a Bitcoin node will need to upgrade their software to continue using the hard forked chain. The solution was highly controversial for small blockers, who felt the hard fork was too extreme. Although the solution was widely publicized, it failed to gain broad community support.
SegWit
Developer Pieter Wuille proposed a solution called SegWit (Segregated Witness). This solution proposes removing transaction signature data from blocks to reduce the size of each block and thereby increase block capacity. This increases the throughput of the Bitcoin network and reduces transaction fees.
SegWit changed how the block size is calculated, which would effectively result in a small block size increase to about 2 MB, a concept that is still supported by most of the community and embraced by small blockers. It will be implemented via a soft fork, meaning the upgrade is compatible with existing nodes. However, SegWit is technically more complicated, and in addition, it requires 95% of the miners to express their support to activate the upgrade, which was unbelievable at the time.
Bitcoin Classic
Bitcoin Classic is a proposal by the big blockers with Gavin Andresen as the lead developer. This is another attempt to increase the block limit to 2 MB via a hard fork. Bitcoin Classic enjoys widespread support from the likes of Coinbase and various mining pools, and is seen as a more modest attempt at increasing the block size than Bitcoin XTs jump to 8 MB. However, small blockers opposed the measure, arguing that it would not gain support from miners.
New York Agreement
On May 22, 2017, leaders from 58 cryptocurrency companies and some miners held a meeting where they worked out a two-phase solution: activate SegWit, then double the block limit from the original SegWit proposal . They believe the conflict can be resolved by combining a soft fork (SegWit) and a hard fork (increasing the block size), giving each camp a piece of the solution they have been working towards.
Many in the crypto community see the agreement as a corporate takeover of the Bitcoin network. They were outraged that there was no mention that Bitcoin users are the ones who control the protocol and that their support is needed before changes are enacted. Small block proponents have expressed particularly strong opposition to the protocol, noting that they feel they are not represented. After months of contentious debate, the proposal was suspended in November 2017, and the second phase of the protocol (increasing the block size via a hard fork) was abandoned entirely.
Bitcoin Cash
Big blockers are not satisfied with the outcome of the New York agreement and still want to increase the block size. A group of miners and developers parted ways in July 2017 to launch a Bitcoin hard fork, initially called Bitcoin ABC and eventually renamed Bitcoin Cash.
Bitcoin Cash’s block size is 8 MB and increases over time, resulting in higher throughput and lower fees. Furthermore, developers believe that Bitcoin Cash is necessary because it is a payment system.
UASF
The Small Blockers camp, while smaller and much less funded than the Big Blockers, has become an increasingly vocal and persuasive group. They are still fighting to support SegWit. However, SegWit is nowhere near the 95% miner support required for activation.
Developer Shaolinfry has introduced a new strategy called the User Activated Soft Fork (UASF User Activated Soft Fork). Traditionally, soft forks are triggered by miners, which gives them control and power over the network.
Shaolinfrys proposal, called BIP 148, would have users running nodes signal support for SegWit before the activation date and not accept non-SegWit blocks from miners. If enough nodes express support for SegWit, miners must accept the upgrade before the activation date or their blocks will be rejected.
The risky idea paid off when SegWit was activated on the Bitcoin network in July 2017, with Bitmain, the largest miner, voicing support and others following suit to implement the upgrade. SegWit also laid the groundwork for the Lightning Network, a protocol built on top of the Bitcoin blockchain to enable off-chain transactions.
4 ending
The block size war was a technical debate that took place between 2015 and 2017 over the scaling of the Bitcoin blockchain software. The debate exposed deeper practical and theoretical disputes within the crypto ecosystem, such as who controls the protocol and long-term plans for Bitcoin’s market share. This block size war spans multiple technological changes and events, including the creation of Bitcoin Cash and the adoption of SegWit.
Reference article:
https://www.bitstamp.net/learn/crypto-101/what-was-the-blocksize-war/
https://www.coindesk.com/learn/what-is-the-bitcoin-block-size-debate-and-why-does-it-matter/
https://steemit.com/bitcoin/@tobixen/a-brief-history-of-the-bitcoin-block-size-war
