Scaling has always been an issue for bitcoin and several attempts have been made in the past to force the developers to implement bigger blocks which will give the network an instant boost but the developers have been opposing the block size increase for quite sometime.

Reasons Why Bitcoin Developers Oppose Block Size Increase

A block size increase doesn’t require any effort and can be achieved by changing only a few lines of code but it comes with a lot of issues. The block size increase will cause a hard fork in the bitcoin blockchain which will require everyone currently using bitcoin to upgrade their software or get disconnected from the network.

One of the major issues with increase in the block size is the reduction in decentralization. Amount of Decentralization is the only thing that makes bitcoin better than any other cryptocurrency. Increasing the block size will cause many of the bitcoin nodes to shut down as increase in the block size will mean increase in memory usage and storage space required for validating the bitcoin blocks. A study by Bitfury suggested that 95% of the current bitcoin nodes will be excluded from the network within 6 months if the block size is increased to 8MB.

Since running full nodes will become expensive, it will also cause more mining centralization which bitcoin has been trying to get rid of for years now.

Also, a different scaling solution “Segwit” has been deployed on the bitcoin network via a soft fork which will give the network more scaling as users upgrade. Since the upgrade is not mandatory, it will take some time to get adopted. As of writing of this article, 15% of all the transactions on the bitcoin network are using segwit. Segwit can improve the efficiency of the network by 2.5 times and also allows other off chain scaling solutions such as Lighting to be built on top of bitcoin.

Segwit has already provided some relief to the network and the network will keep becoming more and more efficient as segwit is adopted. Since there is no more need of immediate scaling, bitcoin developers want to avoid more damage to the network decentralization.

Why Bitcoin Businesses Support the Block Size Increase?

Since the scaling debate started, miners have been on the side demanding the block size increase. After the non mandatory upgrade segwit was deployed to the network, miners prevented it from getting activated for over an year.

As the community was annoyed with the way miners were blocking segwit activation, they chose a different route for getting segwit activated. A movement called “UASF” was started. UASF required people to upgrade their nodes. After August 1, if any miner that wasn’t signalling for segwit submitted a block to these nodes, the block would get rejected. The UASF movement gained momentum and over 1300 nodes were supporting the movement.

UASF might have gotten segwit activated on August 1 but there was also a danger of a fork in the bitcoin blockchain. This is when bitcoin businesses stepped in as they wanted to avoid a messy situation. They setup an agreement with the miners which stated that if miners activate segwit before August 1st, they will get the developers to upgrade the block size to 2MB without consulting any of the bitcoin developers. Since agreements are completely against the bitcoin consensus mechanism, none of the bitcoin developers agreed to do the same.

As businesses love to follow their agreements, they went ahead with the agreement and hired Jeff Garzik to implement the block size increase in the code. The code was deployed to the network via a different implementation and a hard fork to 2MB was scheduled in November.

As segwit got activated. the transaction prices started dropping and don’t require a instant upgrade, the bitcoin developers are still against the agreement. Since the businesses love to honor their agreements, they are still supporting the split and the scene is now that the agreement that was preventing the split in the bitcoin network, is now the reason of the upcoming split.

Conclusion

A block size increase may be helpful for the bitcoin network but without any developer support it makes no sense since they are the people that know this stuff better. It can be argued that the signing of the controversial New York Agreement was in good faith but promising something that businesses don’t have to power to provide was wrong. And if they could force something on the developers, it would mean that they have the power to deploy controversial upgrades to the bitcoin network which completely defeats the purpose of bitcoin. We hope that the segwit2x fork will be cancelled in the future and a better solution will be achieved.

Let us know what you think about the need of scaling in the bitcoin network.