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Here's the super-summarized story for those who are out of the loop: the Bitcoin community has been fighting for years over what they call the "block size incre
by Meekro 9y ago
Here's the super-summarized story for those who are out of the loop: the Bitcoin community has been fighting for years over what they call the "block size increase." From its original design, Bitcoin has capped each block to 1MB, which effectively caps the transactions per second to 4 or so. Raising this limit would allow more transactions per second onto the network, but with the downside of making nodes in the Bitcoin network more costly to operate. The majority of current Bitcoin developers do not want to raise this cap. However, a large group of users and several of the earliest developers (including Gavin Andresen, the guy hand-picked by Satoshi Nakamoto) do want to raise it. There is evidence that Satoshi himself thought that the cap should someday be raised.
There was recently a compromise struck among the largest bitcoin exchanges and mining pools. It was called the Silbert Agreement, or New York Agreement, or Segwit2x. The agreement was to deploy a feature upgrade that the current developers had been pushing (called Segwit) alongside a block size increase from 1MB to 2MB. It broke a stalemate in which the big blockers had been preventing Segwit from going live, and the Segwit supporters had been refusing to increase the block size.
The deal was that Segwit would go live immediately, and several months later, the block size increase would go live. Segwit did go live as agreed, but then its proponents refused to honor the rest of the agreement (since they already got what they wanted).
That was a few days ago, and now we're seeing the backlash: lots of users and capital fleeing to "Bitcoin Cash," a separate branch that recently forked off from the traditional Bitcoin. Proponents (including Gavin Andresen) consider this new branch to be the true Bitcoin, because it's willing to scale with user demand as Satoshi Nakamoto intended. Opponents consider it to be an altcoin that's fraudulently calling itself Bitcoin, since its block size increase is a departure from the original spec.
- econner 9y agoThanks for the overview. Very helpful to someone w/ no previous knowledge. Why did the majority of developers not want to raise the block size? / How exactly does it make nodes much more expensive to operate?
- pmorici 9y agoThere exact reasons are a point of contention. But a lot of people believe that they thought it was in their interest to keep the block size small because they hold a business interest in companies who's business plan is to make money by selling so called "second layer" solutions. The direction of development is really controlled by a handful of people and they also have control of 3 of the historically important Bitcoin discussion forums so they were able to control the narrative for years and push out anyone who brought up contrarian opinions on the block size.
- Meekro 9y agoEach node in Bitcoin's P2P network has to store a copy of every transaction since the beginning of time. This currently takes 140GB of disk space and is growing by 5GB per month. If more transactions are allowed to go through, it'll grow even faster. If it grows to extremely large numbers, only those who can afford the huge disk arrays will be able to run a node. The fear is that eventually, only major companies and universities will be running Bitcoin nodes. This could make it easier for governments to threaten all involved parties into changing or dismantling the system. However, those who want to raise the block size say that government agents threatening Bitcoin node operators is not a realistic fear. Whereas, if transactions can't go through because the network refuses to scale, then businesses will abort their plans to accept Bitcoin. To big blockers, such a scaling failure is much more likely to kill Bitcoin than government agents in dark suits.
- ajmurmann 9y agoTrying to work around the problem of all part transactions having to be present on a node by limiting the number of transactions that can happen honestly sounds like a silly joke. The entire point of any currency is easy, cheap and fast transactions.
- Anderkent 9y ago> The entire point of any currency is easy, cheap and fast transactions. All of those are relative, and part of tradeoffs with other values. If you think those are the only important properties of a currency, you're missing the entire motivation behind crypto currencies.
- ajmurmann 9y agoFor a long time one of the big promises of Bitcoin was that you can easily, cheaply and quickly transfer them even to people in other countries. I assume the benefits you are referring to are political? Like lack of central per controlling it? If so, I don't think that will run over every day Joe.
- kristianp 9y agoWhat's happening with the price of BCH is really interesting, but if you think about the liquidity of BCH vs BTC, there are far fewer BCH able to be sold on the market, so all it takes is a concerted effort by relatively few traders to increase the price of BCH until it looks like the market cap is comparable. BCH liquidity is a fraction of BTC. If you are the owner of BCH because you held BTC at the time of the fork, there 's little chance you have gone to the trouble to copy wallets to a separate computer, move your original coins (to prevent a double spend) and install a BCH wallet.