Bitcoin's New Record: Why the Scaling Controversy Won't Disappear

Rage Review : This week, a Bitcoin startup Purse proposed a new solution that aims to solve the current Bitcoin dispute through a soft fork. However, the response from industry insiders was as complicated and mixed as usual, or generally negative, which seems to be an expected reaction. Since the dispute emerged in 2015, various solutions have been proposed, and similar solutions have emerged one after another, with nothing new to say. This seems to have become a routine, and there is no end in sight for the discussion about solutions, but this may not be a bad thing in the context of technological innovation.

Translation: Clover

This week, a bitcoin startup proposed a new approach to resolving the bitcoin scaling controversy, sparking an all-too-familiar response.

Conversations escalated on Twitter, different camps of debate quickly formed, deceptive information in the mass media quickly spread as rumors, and the proposals that were ultimately put forward may only prove that the differences among technology supporters have become a new standard.

Bitcoin startup Purse’s proposal to upgrade Bitcoin to support so-called “extension blocks” is just another rerun of an old story, just another proposal for the scaling controversy that began in 2015 and has lasted for several years.

As advertised, extension blocks offer a way for bitcoin users from across the network with different needs to live by their own rules, essentially enabling nodes to choose their own block size while remaining on the same network.

Because the solution only requires a soft fork, meaning that not all nodes in the network need to be updated, the team says it is a way to resolve bitcoin’s current impasse over how to maximize the digital currency’s transaction capacity.

In light of this, some developers pointed to online discussions about similar proposals from months (or even years) ago, which revealed potential security flaws in the plan. Others believe that the solution may take another year to be tested and deployed, while another solution, Segregated Witness, has already passed this process.

In other words, not everyone agrees that the new solution is safe.

The response was complex and mixed

This seems to be par for the course for the industry, with two similar incidents occurring last week.

During this time, while the proposals appear to draw on a number of competing ideas, there has been talk of the network beginning to adopt a hard fork, a highly controversial upgrade that risks splitting Bitcoin into two separate networks.

Wang Chun

Wang Chun, co-owner and executive director of mining pool F2Pool, submitted an unusual idea to the Bitcoin mailing list because it would not be triggered before 2020. His idea is to lock in 32MB of blockchain capacity, which the Bitcoin community could then change to a smaller size before the activation date using a soft fork.

However, Chun’s idea is similar to Purse’s and is not new. He said he proposed the idea at a scaling conference in Hong Kong last year, and Bitcoin Core contributor Luke Dashjr has also published a similar concept.

His proposal ends with a warning that those who have been following the controversy may have heard before:

“We have to start coding something now, or it will be too late.”

All in all, this was another proposal that didn't receive full support, but it did receive over 70 responses immediately, which is a very high number for a mailing list, with a wide range of "yes" and "no" responses.

A few days later, Rootstock (RSK) developer Sergio Demian Lerner published another hard fork proposal. It differs from Chun’s in the sense that it includes two changes: Segregated Witness (a solution supported by core developers) and a hard fork that doubles the block size parameter (an idea often expressed by miners).

While the idea has won some supporters, the reaction is still mixed. Not all developers think it is a novel idea. Moreover, because it requires a hard fork, many people are not willing to accept the idea at all.

“These are hard forks, so they’re not worth considering until any near-term activation,” Bitcoin Core contributor Bryan Bishop told CoinDesk, adding:

“If you want to do a highly contentious hard fork and split into two networks, it’s better to choose a new name, a new address prefix, enable replay protection quietly, and fork.”

Hold meetings, repeat

The fork proposal may not be the only major event that keeps recurring in the industry.

Digital Currency Group (DCG) co-founder Barry Silbert has confirmed that the venture capital firm will hold another scaling conference in May. However, not everyone sees it as a significant milestone.

Barry Silbert

Bitcoin investor and Bitcoin.com operator Roger Ver said when the possible attendees were initially listed that he did not plan to attend the meeting.

He said:

"There have been many meetings, but none of them have resulted in a lasting agreement, and I agree with that."

Such a meeting will go down in the history of approaches to scaling solutions, and it also included many face-to-face meetings.

One notable example is the famous “Hong Kong Agreement,” which saw a group of developers and miners agree on a roadmap, then encounter delays and objections from those who were not present at the meeting.

Since then, expectations for face-to-face meetings have declined, a situation exacerbated by the fact that no one wants to be seen as being in charge of or making decisions about the protocol.

Blockstream CEO Adam Back declined DCG’s invitation, citing what he saw as a reference to him representing the group of volunteer Bitcoin developers.

In an email to investment firms that have equity in Blockstream, he wrote:

“There have been people who have assumed that Blockstream [is the same as Core], or have implied that I represent Bitcoin developers, both of which are incorrect, so if that assumption was made in the meeting, it would only provide a misrepresentation.”

A ray of hope

This ongoing confusion about who represents what or speaks for whom makes the discussion more difficult. In reality, regardless of the proposals, even if there is some consensus on the technical solution, there will still be the question of who gets to decide what the protocol is.

Users, businesses, miners, and developers, although choosing between them remains a challenge as evidenced in the above exchange to determine who falls into which category.

Blockstream co-founder Pieter Wuille illustrated the problem of understanding in his response to Chun’s proposal, arguing that developers do not have the power to force bitcoin users to accept changes such as a 2MB block size increase.

He believes that if Bitcoin Core “blacklists” some network activities in a new software version, users can choose not to download the new software version if they do not support the change.

Still, it can be argued that despite the negative sentiment, it has stimulated public discussion to a new historic level.

With at least three scaling ideas proposed in the past week, joining the lineup of solutions that have been discussed over the past few years, it seems that there is no end in sight to the ongoing conversation, which may not be a bad thing in the context of technological innovation.