Bitcoin Scaling War, Have You Been "Enlisted"?

2017 is destined to be a year of unrest for the development of Bitcoin. In addition to the roller coaster-like stimulation of prices, Bitcoin is also facing the current situation of capacity expansion. For ordinary investors, Bitcoin capacity expansion seems to be a topic discussed only by technical experts. As spectators, we can only wait for the result that may be "predetermined". If we use the simplest and most understandable words to describe Bitcoin capacity expansion, there are probably three factions holding different views.

There are probably three factions holding different views on Bitcoin expansion. Image source: Golden Finance

In Satoshi Nakamoto's Bitcoin white paper, the block size is set at 1m. After more than 8 years of development, the number of Bitcoin participants has continued to increase, and the block size has obviously been unable to meet the needs of users for payment and transfer. The speed is slow and data cannot be confirmed. This directly leads to the need for Bitcoin to expand its capacity, increase the block size, and speed up the transfer speed.

The first is Bitcoin soft fork - Segregated Witness

Segregated Witness is a Bitcoin soft fork. Image source: Golden Finance

The first is the Bitcoin soft fork represented by the Bitcoin core development team Bitcoin core. Bitcoin soft fork means that when the Bitcoin protocol rules change, the old nodes will not realize that the rules are different. They will follow the changed rule set and continue to accept blocks created by new nodes. Bitcoin miners may work on blocks that they do not understand or verify at all. The Bitcoin core team pointed out that the capacity can be expanded by using the method of segregated witness and lightning network (SW), that is, without changing the size of the Bitcoin blockchain main chain to 1M, the second-layer lightning network can be used to process small Bitcoin transaction settlements, thereby speeding up the transfer confirmation between users.

The second is Bitcoin Unlimited, a hard fork of Bitcoin

Bitcoin hard fork advocates using market behavior to determine the size of the main chain block. Image source: Golden Finance

The second is the Bitcoin hard fork represented by Gavin. Bitcoin hard fork means that when the Bitcoin protocol rules change, the old nodes refuse to accept the blocks created by the new nodes. Miners will create blocks with new rules after the Bitcoin hard fork height block according to their rule set, and nodes that are unwilling to accept the new rules will independently continue the old rule blocks.

Bitcoin hard fork advocates using market behavior to determine the size of the main chain block, namely Bitcoin Unlimited. That is to say, as the number of Bitcoin participants and users continues to increase, the block size will increase accordingly, and this behavior and value should be determined by the market. Since it is a Bitcoin hard fork, from a literal meaning, users will often compare this type of fork with the hard fork of ETH, that is, directly splitting into two currencies, which will cause panic in the market.

It is worth mentioning that Gavin was once a member of the Bitcoin core development team, and was known as the "Successor of Satoshi Nakamoto". After Gavin took over the Bitcoin core code, Satoshi Nakamoto gradually disappeared and stopped speaking in the community. Considering fairness, Gavin formed the Bitcoin core team whose main work is to maintain the Bitcoin core code. Due to internal differences of opinion, the Bitcoin hard fork advocated by Gavin and himself was excluded.

The third is Segregated Witness + 2MB

Hong Kong consensus on Bitcoin expansion "Segwit+2MB" Image source: Golden Finance

The third is that when the debate on Bitcoin hard fork and soft fork was evenly divided, someone proposed a more neutral approach, which was to increase the size of the main chain block while using the lightning network. This approach was supported by many people in the community, and was considered to be able to break the long-standing expansion deadlock of the Bitcoin network. At the Hong Kong Bitcoin Scaling Roundtable held in February 2016, Bitcoin Core and Chinese miners reached a consensus to use the lightning network to process transactions while increasing the main chain to 2M.

But soon after the agreement was signed, the Bitcoin core development team, Bitcoin core, violated the signed agreement and refused to implement the 2M expansion plan, and the two sides fell into constant disputes again. Some industry insiders pointed out that in order to implement the Bitcoin soft fork, supporters hired secret water armies to carry out reputation attacks, slander, and rumors in foreign communities. The domestic community is also full of debates. On the issue of Bitcoin expansion, the community has also shifted from the exchange's restriction on withdrawals to the contradictions of the expansion team.

What do Bitcoin users really care about?

Bitcoin users eventually consider whether their Bitcoin will fall. Image source: Golden Finance

As Bitcoin investors who do not understand technology, what exactly do they care about when it comes to capacity expansion? In the end, they still consider whether the coins they hold will fall. However, the political, economic interests, and technological changes of Bitcoin and the entire Bitcoin ecosystem have led to disagreements on the issue of capacity expansion. They often do not consider these issues much, and the actual development of things seems to have nothing to do with them. Now all parties have their own set of theories. These seemingly reasonable arguments are just based on the length of the article to determine their reading time. As for the issue of standing in line, even for participants who have the right to vote, the voting results dominated by public opinion are just a formality.

Bitcoin is not perfect, but Satoshi Nakamoto had already thought of the decisive force in the direction of Bitcoin optimization, namely, proof of work. Satoshi Nakamoto explained in detail in the white paper that the chain with the most cumulative proof of work is the valid Bitcoin chain. In other words, it is determined by miners. But what Satoshi Nakamoto did not expect was that in the development of the Bitcoin community, in addition to miners having a say, there are also many people who want to express their own opinions, and this opinion guided by public opinion obviously deviates from the original intention.