Speed Read: Vitalik | Bitcoin Block Size War Reflection: The Story of Two Perspectives

Ethereum co-founder Vitalik Buterin stated: The block size war of the 2010s was a pivotal event in the history of cryptocurrency. This war divided the Bitcoin community and had far-reaching implications for the future of blockchain technology. Recently, I delved into two books that describe the opposing viewpoints of that period: Jonathan Bier's "The Blocksize War" and Roger Ver and Steve Patterson's "Hijacking Bitcoin." These books provide interesting insights from different perspectives on this debate. As someone who experienced and was involved in this conflict, I found reexamining these events to be enlightening.

It appears that Vitalik's article is using the Bitcoin cultural war to subtly imply the development direction of Ethereum's culture, so as not to repeat the past mistakes.

Small Block Perspective

The Core of the Debate: How Big Should Blocks Be?

The central issue of the block size war is whether Bitcoin should increase its block size limit from 1 MB to a higher value. This change would allow more transactions to be processed, reducing fees, but also increasing the cost and complexity of running nodes.

Arguments for Small Blocks

According to Bier's book, supporters of small blocks believe that significantly increasing block size would lead to centralization in Bitcoin. Larger blocks require more powerful hardware to run nodes, which could limit participants to those with large data centers. This would undermine the core principles of decentralization and anonymity in Bitcoin.

Governance and Consensus: Keeping Power with the Larger Community

In addition to technical aspects, supporters of small blocks are also very concerned about governance issues. They believe that changes to the Bitcoin protocol, especially hard forks, should be rare and require widespread consensus among users. They worry that frequent or large-scale changes could lead to power centralization among miners, exchanges, and other major players, shifting control away from the community.

Key Historical Event: The New York Agreement

The 2017 New York Agreement was a focal point of the debate, where major Bitcoin exchanges, miners, and companies advocated for increasing block size. Supporters of small blocks saw this as a few powerful entities trying to impose their will on a broader community, contradicting Bitcoin's decentralized spirit.

Big Block Perspective

Bitcoin's Purpose: Digital Gold or Digital Cash?

In contrast, Ver and Patterson's book presents the view of big block supporters, who believe that Bitcoin should be digital cash, not just a store of value. They argue that low transaction fees are crucial for this purpose, and block size needs to be increased to accommodate more transactions.

Faithful to Satoshi's Vision

Big block supporters often reference Satoshi Nakamoto's writings, supporting the idea of gradually increasing block size. They believe that the shift of Bitcoin to "digital gold" was driven by a small group of developers, not the entire community, leading to a deviation from the original vision.

Layer 2 Solutions and Their Limitations

While small block supporters propose layer 2 solutions like the Lightning Network to handle transactions off the main blockchain, big block supporters criticize these solutions as untested and overly complex. They argue that without increasing block size, Bitcoin will not be able to effectively scale to support a global user base.

Philosophical Differences and Technical Challenges

Diverse Views on Governance and Control

Bier and Ver's book highlights profound philosophical differences. Small block supporters emphasize the need to maintain decentralization and user control, while big block supporters focus on practical usability and scalability. Both sides accuse each other of power centralization, whether in the hands of large companies or a few developers.

Limited Technical Capabilities

Big block supporters often face challenges in technical execution, leading to internal and external criticisms. Bier's book points out various technical mishaps, such as poorly written code and inadequate security measures, which have undermined their credibility.

Vitalik's Personal Reflections

Vitalik's Initial Stance and Evolution

He stated, "During the block size war, I leaned towards the big block supporters, prioritizing lower transaction fees and scalability. However, I also recognized the valid concerns of small block supporters regarding decentralization and governance."

Looking back, Vitalik sees the merits of both perspectives. Taking a balanced approach, moderately increasing block size while developing robust layer 2 solutions could alleviate conflicts. Unfortunately, both sides remained entrenched in their views, leading to a prolonged and divisive battle.

Lessons from the Bitcoin Block Size War for the Future

Unilateral Capability Trap

The block size war illustrates a common issue in politics and technology: the unilateral capability trap. One group often monopolizes technical expertise, while the opposition focuses on criticism without building the necessary capabilities to implement their vision.

Embracing New Technologies

Vitalik suggests that the key to reducing conflicts in the crypto space in the future lies in embracing new technologies that can offer solutions to all parties. Innovations like ZK-SNARKs and improvements in layer 2 protocols have the potential to address scalability and privacy issues without compromising decentralization.

The Bitcoin block size war is not just a technical debate; it is a battle over the future direction of cryptocurrency governance and philosophy. By studying this period, valuable insights can be gained into the future challenges and opportunities of Bitcoin and other digital currencies, understanding that these historical lessons are crucial for continuing to build and enhance decentralized technologies in the future.