SegWit-2MB: The Solution to the Block Size War – or the Submission of Bitcoin to Politics?

Bitcoin developer Sergio Lerner has proposed a compromise, a 2MB hard fork with a SegWit soft fork. The developers are not overly enthusiastic, while some prominent members of the community are thrilled.

In older times, when wars were not yet mechanized and digitized, the opposing parties made peace often just for the reason that they have become war-weary. The nations and empires became drained from the war, and whatever the goals have been – the cost of more war was higher than the renounce of the victory.

Sometimes you can think that Bitcoin’s block size war could similarly end only by exhaustion. The rally altcoins saw last weeks might be a first, strong signal that the years long conflict how to scale Bitcoin did reach a point, in which the costs of it became clearer and clearer. The fear, to miss departure becomes bigger than the fear of doing something imperfect.

Accordingly, Argentinian Bitcoin developer Sergio Lerner announced his SegWit-2MB proposal in the Bitcoin mailing list explicitly with the following preamble, “The sole objective of this proposal is to re-unite the Bitcoin community and avoid a cryptocurrency split. SegWit-2MB does not aim to be the best possible technical solution to solve Bitcoin technical limitations […] it is not a new solution, but it should be seen more as a least common denominator.”

Lerner’s proposal is rather simple. Do both:

“SegWit-2MB combines SegWit as it is today in Bitcoin 0.14+ with a 2MB block size hard-fork activated ONLY if SegWit activates (95 percent of miners signaling) but at a fixed future date.”

His goal is to have a minimalistic solution, which can be written, reviewed and tested in a short amount of time. SegWit should be available in the very new future, while the hard fork to 2MB should be activated somehow around December 2017.

“I want to see miners, developers and industry side-by-side pushing Bitcoin forward, to increase the value of Bitcoin and prevent high transaction fees to put out of business use-cases that could have a high positive social impact. I believe in the strength of a unified Bitcoin community,” Lerner evokes the community to take a path to unity.

Seems like he has a good point. The idea to do both – SegWit and a 2MB hard fork – has also been the item which got most support in a survey in the surrounding of German Bitcoin marketplace Bitcoin.de. But how did other developers react?

Not Much of a Helpful Idea…

The first answer, Lerner got on his proposal, was not really encouraging. Matt Corallo, Bitcoin Core developer and co-founder of Blockstream, gave a somehow educating answer:

“You appear to have ignored the last two years of Bitcoin hard fork research and understanding, recycling instead BIP 102 from 2015.”

Corallo criticizes that the only foundation of Lerner’s proposal was a “compromise for compromise sake.” He advised Lerner to consider, “as a minimum,” several things to do, going from the better mechanism for the activation of the hard fork to new limits for non-SegWit block space and an improvement of the economic mechanism of SegWit. But even if he did – Corallo sees a lot of risks in Lerner’s proposal for which he does not know technical solutions.

Other developers reacted similarly. Jorge Timón, also co-founder of Blockstream, explains the problem with the SegWit-2MB: “If SegWit is controversial the way it is […], adding more consensus rule changes won’t make it any less controversial. If anything, it would be removing consensus rule changes, not adding them that could make it less controversial.” Timón doesn’t want to discourage Lerner, but says, “I really don’t see how it helps getting out of the deadlock at all.”

Some other people, both on the side of Core as of Unlimited, disqualified SegWit-2MB as “the worst of both worlds.” If you have SegWit, you do not need a block size hard fork now; and if you have a hard fork, you do not need to go down the SegWit as a soft fork path.

A Proposal to Heal the Community Split

Erik Vorhees, founder and CEO of ShapeShift.io, however, likes the proposal. On his Blog Money and State, he presents Lerner’s SegWit-2MB and adds the comment: “And I’d like to make the case that it should be considered…”

Like Lerner, Vorhees appeals on the unity of the community: “Society needs what we’re building, not to be forced upon them, but rather offered; a kind and reliable refuge from the tyranny of the world’s financial manipulators. That’s why many of us are involved.” During the past few years, however, something changed: “The former friendship among strangers, a rare camaraderie derived from the justness of a great cause, has decayed into conflict. We all see and feel this, and for those of us who truly care about this project, it is miserable. Perhaps many had even forgotten what the community felt like just a few years ago when the enemy was not ourselves.”

But that’s just a part of the whole story:

“Further, the unfortunate context in which this is occurring is one of diminishing utility on the platform: transactions are getting more expensive and less reliable. The user experience of sending a Bitcoin transaction today is worse than it was two years ago […] Do not let yourself be tricked into thinking that the rising price implies fundamental soundness. Prices follow utility, and the latter may fall well before the former realizes it.”

Bitcoin is a brilliant machine – but also and maybe more importantly: a social project. Lerner’s proposal is for Vorhees not unique for technical reasons, but “in its potential to unify. It has the potential to unify not only disparate technical beliefs but the social fabric of this community, which is as important. Any alternative, which even may be superior technically, while not resolving anything socially, must be said to be in fact inferior.”

Andreas Antonopolous, the most prominent Bitcoin speaker, agrees with Vorhees on Twitter; SegWit-2MB is not perfect, but better than more scalability war.

Agreeing with Eric. Segwit2MB is far from ideal but better than more scaling war. A political, not tech solution. https://t.co/3ASD6oHwLv — Andreas M. Antonopoulos (@aantonop) April 2, 2017

Does Bitcoin Need to Ignore Every Political Decision?

Sure, not everybody agrees with Vorhees and Antonopolous. This is the Bitcoin community. Many even think it is a recipe for a disaster to submission Bitcoin development under political compromises.

Adam Back, CEO of Blockstream, pointed to the hard fork research of Core developer Johnson Lau and reminded to separate science and politics:

See https://t.co/mKyLWzT1Ko and upcoming posts. Dont let politics scientific progress. That way lies moral hazard and political currency. — Adam Back (@adam3us) April 3, 2017

And Nick Szabo, who has been alleged to be Satoshi Nakamoto, but most likely is not, added that SegWit-2MB is like appease an angry mob by damaging Bitcoin’s security.

It tries to appease an ignorant mob at further expense to Bitcoin's security. — Nick Szabo 🔑 (@NickSzabo4) April 3, 2017

As a matter of fact, it is problematic to make Bitcoin development dependent on political solutions. After all, it is the distance from politics which explains why most people like Bitcoin. What when the politicians start to demand the blacklisting of transactions? What if they want to regulate the creation of new coins? Where does it stop?

On the other side, you should be aware that it is an illusion that there is no politics in Bitcoin. You can never find a consensus without politics, even if you do not see them on the surface.