Eight Years of Block Size War The Revelations of Blockchain’s Balancing Philosophy

Until today, the block size is one of the most discussed topics among blockchain developers. How much content a block can hold involves the hardware requirements of the nodes, which in turn affects the decentralization of the entire chain. Different views on this issue have also brought about different consensus designs, and of course, many well-known forks. Looking back at the brief history of cryptocurrencies, perhaps all of this can be traced back to eight years ago today.

On August 15, 2015, Gavin Andresen and Mike Hearn, two early technical pioneers of Bitcoin, jointly announced in a blog post that their new version of BitcoinXT would implement the BIP-101 proposal, which would be activated directly without the need for miner voting. This day later became known as the “block size war outbreak day”.

The Crossroads of Blockchain

Since the birth of Bitcoin in 2009, the Bitcoin community has been divided on some key issues. Among them, the debate over the size of Bitcoin blocks has been the most intense. This controversy originated from the original intention of Bitcoin’s design. Satoshi Nakamoto, the mysterious founder, set a limit of 1 megabyte for the size of each block in order to prevent meaningless transactions and data inflation. However, as Bitcoin became more popular, this limit began to seem inadequate, leading to network congestion and longer confirmation times. In fact, as early as 2013, core developer Jeff Garzik proposed doubling the block size to 2 megabytes, which sparked the initial discussion on block size within the Bitcoin community.

In 2015, the controversy escalated further. Developers who supported expanding the blocks launched the Bitcoin XT project, attempting to directly increase the block size to 8 megabytes.

On one hand, Gavin Andresen and Mike Hearn, two original developers who had deep conversations with Satoshi Nakamoto, tended to increase the block size to 8 megabytes as a strategy to cope with the growth in transaction volume. On the other hand, core developers like Greg Maxwell, Luke-Jr, and Pieter Wuille warned that excessive expansion could result in fewer nodes being able to run full nodes, thereby reducing the decentralization of Bitcoin. They even suggested that a hard fork could lead to chaotic splits in the network, and that relentlessly pursuing larger blocks was not the best solution for scalability.

At the same time, 2015 also witnessed the birth of Ethereum. Its founder, Vitalik Buterin, although a staunch supporter of larger blocks, focused his ideas on the Ethereum chain. He believed that the scalability of a chain should have no boundaries, and all smart contracts and data should be included in the chain, while providing larger blocks and lower transaction fees.

This controversy subsequently turned into a serious split within the Bitcoin community. The two sides engaged in multiple rounds of heated discussions surrounding block size but were never able to reach a consensus. The block size war initially started as a debate on how to scale the network to handle increased transaction volume, but later evolved into a philosophical debate about the ultimate purpose of Bitcoin and the “political drama” of managing this open-source project.

In 2017, developers supporting large blocks initiated a hard fork of Bitcoin called Bitcoin Cash, which directly increased the block size to 8 megabytes. This led to the official split of the Bitcoin community into two factions. Those who supported small blocks continued to maintain the original Bitcoin blockchain, while those who supported large blocks created a new Bitcoin Cash blockchain. Thus, the Bitcoin block size controversy resulted in the first and largest fork in blockchain history.

After the fork, the two chains developed separately, and the block size controversy continued. Bitcoin remained with a block size of 1 megabyte, while Bitcoin Cash further increased the block size to 32 megabytes in 2018. Ultimately, the small block camp emerged as the winner of this block size war. However, winning a battle does not mean the war is over, as new BIPs continue to be proposed and there are still many debates between the small block camp and the large block camp.

Brc 20, Ordinals: A New Battlefield of Power Struggles

The Bitcoin Taproot upgrade unintentionally opened up a new design space, allowing users to engrave arbitrary content on the blockchain. In 2023, the Bitcoin ecosystem gained some unexpected gameplay, including Brc 20, ordinals, and Bitcoin NFTs. With the emergence of these gameplay elements, new controversies arose and escalated, which some people referred to as another form of the block size war.

Firstly, the emergence of these gameplay elements led to a surge in gas fees. From the perspective of miners, this was undoubtedly a good thing because from the summer of 2021 to early 2023, the Bitcoin block space was almost deserted, and miners’ income was minimal. However, for those who cannot afford high gas fees, this is not a good thing. “I mainly onboard in Africa. They don’t have the privilege to pay these high fees like you do. They really need BTC, and you guys are just playing around,” Bitcoin educator and Anita Posch wrote on Twitter.

More importantly, Brc 20 and Bitcoin NFTs challenged the 1M block size limit. The most notable example is the founder of Meme NFT Taproot Wizards, Udi Wertheimer, who intentionally planned the largest block and transaction in Bitcoin history, with a block size of nearly 4 megabytes, which was called the “largest Bitcoin block ever” and was accused by many of attacking Bitcoin.

Blockstream CEO Adam Back, Bitcoin Core developer LukeDashjr, and others believe that this will cause rapid inflation of the Bitcoin blockchain size, significantly increase the requirements for devices running full nodes, reduce the number of full nodes in the network, and decrease censorship resistance. At the same time, unexpectedly large transactions and blocks will impact ecosystem facilities such as wallets, mining pools, and browsers, causing some facilities to behave abnormally, such as certain transactions failing to parse correctly. In addition, mining pools or miners may choose not to download and verify these huge transactions and blocks in order to reduce synchronization and verification time, which poses security risks.

They even harshly criticized the behavior of the Taproot Wizard, stating: “This is an attack on Bitcoin. Bitcoin blocks have a 1M limit, and the Taproot Wizard’s 4M data is put on-chain in the witness, bypassing the 1M limit for blocks and transactions. If 4M is allowed, then 400M is also allowed! In this sense, it’s not innovation, but an attack on vulnerabilities!”

In response, Udi stated that he himself owns a large amount of BTC and that he did this to make it stronger. Like anything that resists pressure, what doesn’t kill it will make it stronger. He wants to prove a point: the vitality surrounding Bitcoin has stagnated, and he wants to change this state. He understands that if people like him pose a real threat to Bitcoin, then Bitcoin should fail.

Now let’s take a look at BRC 20. Although the popularity of BRC 20 has decreased compared to a few months ago, it still has a significant impact. Since April 23, 2023 (when BRC 20 started trading), Bitcoin’s UTXO set has expanded from 5 GB to 6.8 GB.

Bitcoin enthusiast Ajian (@AurtrianAjian) believes that this design of BRC 20 has a significant impact on protocol security, economics (scalability), and decentralization. First of all, because it does not attach itself to UTXO, it naturally cannot rely on UTXO’s own anti-double-spending mechanism. BRC 20 is built entirely on the “first come, first served” principle based on the order of block transactions. Without this “first come, first served” as the ultimate backing, it is fundamentally unable to prevent negative balance in the form of double spending.

However, there are also many voices of support. Nic Carter, co-founder of investment firm Castle Island Ventures, has talked about how some Bitcoin supporters refuse to use the network for new types of assets like Ordinal NFT and BRC-20, which he believes is a mistake. Considering the crypto-libertarian foundation of the Bitcoin movement, which can be traced back to economist Murray Rothbard and the cypherpunk culture of the 1990s, demanding scrutiny of these non-economic use cases is unreasonable.

Power Balance: Who decides the future of Bitcoin?

Behind these debates is not just a technical disagreement, but a deeper discussion about the purpose of Bitcoin and the philosophical ideas behind it. Governing decentralized open-source projects remains a challenge. What ultimately determines the future of Bitcoin? Developers? Miners? Nodes? The community?

We all know that Bitcoin has no CEO. The governance structure of Bitcoin is composed of users who pay transaction fees, miners who build the Bitcoin blockchain, and node operators who validate transaction ledgers. This decentralized structure ensures the security and decentralization of Bitcoin to some extent, but it also poses challenges for governance. The position of miners is self-explanatory, driven more by incentives. They choose the consensus on the future of Bitcoin based on the incentives they receive.

For core developers, German engineer, entrepreneur, and investor MICHAEL believes that we can admire them, we can donate to them, but we must never regard them as our allies. Because core developers are software developers. The essence of all developers is to like patching and improving code, adding new features and removing old ones. We obviously need their work and should reward it. However, we must also monitor and criticize their work, as we can never know exactly when and which core developers succumb to the “I Can Fix Bitcoin Syndrome,” so we need to assume that they all have it and distrust every line of code they write.

From the perspective of nodes and the community, the Bitcoin Improvement Proposal (BIP) process seems to be an informal procedure. Only less than 1% of Bitcoin users operate nodes, and 99% of Bitcoin users are just “casual” users who temporarily hold Bitcoin in hosted accounts and are completely disconnected from the discussion. If they don’t operate nodes, are their opinions still important? This is an interesting question, but Bitcoin would argue that their opinions are not important. The block size war has pitted 99% of Bitcoin users against the 1% who are technically inclined, leading to a hard fork when some of the 99% of Bitcoin users become node operators.

People from various perspectives and backgrounds cannot stop the vision and expectations of Bitcoin. The “block size war” of Bitcoin has revealed the intense conflict and intersection of technical views in the blockchain world. This debate not only reshapes the development context of Bitcoin but also prompts many people to realize that when building blockchain technology, various design purposes and strategies must be carefully weighed. How to find consensus on core issues in the future blockchain community and carry out healthy competition along the technical path, this road is still long and far.

However, one thing is certain: the spirit and culture of Bitcoin will never wither due to differences of opinion in the community. Each of us is not only a witness but also a participant in this history.

Reference content:

  1. https://www.coindesk.com/consensus-magazine/2023/05/09/theres-no-such-thing-as-high-fees-on-bitcoin/;

  2. https://michaelantonfischer.com/i-can-fix-bitcoin-syndrome;

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