“Preparing a hard-fork is taking a lot of time and the best estimations predict the blocksize limit will be reached in mid-2016. The concern is that if we don’t act now, Bitcoin user experience may begin to degrade substantially.”
-Andreas Lehrbaum, Cubits CTO
If you’ve been paying attention to the recent buzz in the Bitcoin community, you’ve probably noticed there’s been a hot topic of debate in recent weeks: increasing the block size. Bitcoin Foundation Chief Scientist Gavin Andresen’s initial blog post calling for a hardfork in Bitcoin protocol to allow for an immediate block size increase to 20 MB elicited a mass of varied responses from the Bitcoin community. One of the most vocal opponents is Bitcoin Core developer Peter Todd, who accused Andresen of trying to “kick the can down the road” with his proposed solution and suggested the current limits stay in place in a lengthy Reddit post. Others, like Blockchain co-founder Pieter Wuille, expressed skepticism but responded with a more reserved approach. Wuille noted that although he was generally in favour of a change, all possibilities must thoroughly investigated before a hardfork is initiated.
Since Andresen’s blog post, the argument has evolved into something much more than a discussion about block size limits. As Blockstream Co-Founder Gregory Maxwell noted in an email to the Bitcoin development mailing list, the debate is at its core one fuelled by ideological oppositions – response to the possibility of a hardfork is primarily guided by a person’s fundamental belief in what Bitcoin is, and what Bitcoin should be.
In a controversial move, Andresen then threw his support behind BitcoinXT, a patch set that would update node software to include a voting mechanism for miners. XT would implement a hardfork and increase the block size to 8MB in the case of miner consensus (in this case, a 75% majority of 1000 signed blocks). Problematically, XT is an autonomous patch set whose governance exists outside the scope of Bitcoin core developers – meaning it’s a solution that essentially circumvents the developer consensus process. Notably, several of China’s largest mining pools have voiced their support for an 8MB increase but have expressed reluctance to do so through XT. Wang Chung of F2Pool told CoinTelegraph they would not be implementing Bitcoin XT, comparing the theoretical result of a patch set-initiated hardfork to an ‘altcoin.’
“No matter who you are, you cannot make a new coin and declare it is ‘Bitcoin’ simply because you do not agree with other core developers.”
– Wang Chung to Coin Telegraph
At Cubits, we’ve been following the blocksize debate with an eager ear. Here are Cubits CTO Andreas Lehrbaum’s thoughts on the blocksize increase and what it means for the future of Bitcoin.
Andreas Lehrbaum on the Blocksize Debate
The Bitcoin network is currently limited in capacity to about 3-7 transactions per second due to a setting in the bitcoin-core source code which limits the maximum size of a valid block to 1 megabyte. Given the present size of a typical Bitcoin transaction is about half a kilobyte and the expected time between blocks is 10 minutes. What’s especially interesting to the debate is that Satoshi initially added this artificial limit as an ad-hoc transaction-spam prevention measure that was planned to be removed at a later date.
With the increasing adoption of Bitcoin, such a backwards incompatible (a.k.a “hardfork”) change is much more difficult than it used to be. While there is already significant debate about the technical implications of such a change (mainly: the block propagation time will increase which is problematic for some miners and will cause running a full node to rise in cost), the lack of consensus in the core development community has also lead to discussion about the “governance” of Bitcoin development. Should it be a benevolent dictatorship as with many other Open Source Software projects, or should it be completely consensus based? Bitcoin-core maintainer Wladimir J. van der Laan seems to lean towards the latter, which is problematic in cases where consensus cannot be reached.
At the heart of the debate there is a disagreement as to whether the Bitcoin blockchain should serve as a payment ledger facilitating all the world’s payments – showing the purchase of every small coffee and real estate investment on the same chain – or whether it should only be a settlement network for larger transactions and perform smaller payments on a separate network (like sidechains, payment channels or the lightning-network).
At Cubits, we are highly interested in Bitcoin scaling to higher transaction capacity and have been following the blocksize debate with an eager ear. We fully support moving to a larger blocksize and are prepared to upgrade the multiple full nodes we currently operate. Regardless of the off-blockchain solutions developed, 1 MB is simply not enough to facilitate significant growth of the plethora of Bitcoin blockchain applications currently active.
Off-blockchain solutions will definitely play a major role in the future of Bitcoin, sticking to a 1MB blocksize is however putting Bitcoin at a big risk. Preparing a hard-fork is taking a lot of time and the best estimations predict the blocksize limit will be reached in mid-2016. The concern is that if we don’t act now, Bitcoin user experience may begin to degrade substantially.
Decentralization is important for Bitcoin and we shouldn’t opt for changes that put that at risk. However, hardware and bandwidth evolved substantially in the last 6 years, so a moderate increase of the blocksize to about 8MB should be a viable compromise solution for now. At the very least, this will give us more time to reach consensus and for potential off-blockchain solutions to mature.
Andreas Lehrbaum, CTO of Cubits.
After completing his Masters in Computational Intelligence at the Vienna University of Technology and being a successful entrepreneur for 10 years, he co-founded Cubits at the beginning of 2014. An avid Bitcoin early-adopter, he was also one of the founding members of the non-profit organisation Bitcoin Austria in 2011, organising community events, giving talks and co-hosting a weekly Bitcoin podcast.
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