ABCDE | Currency or Gold? The 15-year Controversy of Bitcoin's "Scaling Issue"

The recent debate sparked by the Bitcoin scaling roadmap has resurfaced, with the question of who is right still unanswered. Should Bitcoin function as a settlement layer or digital gold? This question has been accompanying Bitcoin's 15-year history. Crypto venture ABCDE compiled comprehensive data on Bitcoin scalability to provide users with a better understanding of the past and present.

This article is compiled and translated. For any doubts, please refer to the original source.

Should Bitcoin Be a Payment System or Digital Gold?

There has been a long-standing debate about whether Bitcoin should function as a payment system or digital gold.

Satoshi Nakamoto Leaning Towards Digital Gold with Reservations

On June 17, 2010, Satoshi Nakamoto wrote on a Bitcoin forum:

"Large-scale applications and trading represent more complex instructions and larger block space. Therefore, between July and September 2010, Satoshi Nakamoto made multiple modifications to the BTC code, including removing two opcodes, disabling some functions of the Bitcoin scripting language Script, etc."

Satoshi Nakamoto Sets 1MB Limit

Initially, BTC had no limit on block size in order to process the necessary transactions within a given time. However, as the price of BTC was low at that time, it was susceptible to low-cost malicious transactions. To address this issue, Satoshi Nakamoto led a soft fork on September 12, 2010, confirming a 1 MB block space limit. On October 4 of the same year, developer Jeff Garzik attempted to remove the limit in his own developed new client but faced opposition from the community and Satoshi Nakamoto.

Satoshi Nakamoto stated that the block space limit was temporary and could be gradually increased in the future to meet scalability needs.

By December 2010, for unknown reasons, Satoshi Nakamoto issued a final public message and disappeared from the public eye. However, the debate about Bitcoin network scalability was not definitively settled at that time, and the 1MB limit laid the foundation for a series of subsequent disputes.

Other Bitcoin Use Cases Fade Away

During this period, discussions on Bitcoin forums such as bitcointalk also included topics beyond payments, such as appamatto proposing in November 2010 to build a decentralized domain name service on the Bitcoin network. However, this proposal was not recognized by early members, including Satoshi Nakamoto. The BitX in the proposal became a core component of Ethereum and other projects, while BitDNS eventually evolved into the first altcoin, Namecoin.

Scalability Debate Leading to Bitcoin Forks

As Bitcoin gained popularity, network transaction congestion became increasingly severe.

Scalability Dispute Intensifies with Satoshi Nakamoto's Disappearance

In 2015, Gavin Andresen and Mike Hearn announced the implementation of BIP-101 in the new version BitcoinXT, aiming to increase the block space limit to 8 MB. Core developers including Greg Maxell, Luke Jr, Pieter Wuille, among others, opposed this approach, believing it would raise the barrier for running full nodes and introduce uncontrollable impacts.

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