Decentralization is an often underappreciated and misunderstood feature of Bitcoin. Achieving consensus without a trusted third party was the biggest technical hurdle to the invention of a peer-to-peer electronic cash. While centrally controlled monetary networks can be corrupted or shut down, Bitcoin’s decentralized nature makes it permissionless, uncensorable and immutable.
However, decentralization is a design choice which comes with trade-offs and in 2015 the Bitcoin community began an existential debate about what the fundamental features of the network should be.
In The Blocksize War Jonathan Bier recounts the events which unfolded from 2015 to 2017 in relation to the Bitcoin scaling debate and the conflict that emerged in the Bitcoin community which to this day remains the best case study of the decentralized nature of Bitcoin.
The Scaling Debate
The Bitcoin network enables its users to run their own instance of the software called a node, allowing anyone to verify the integrity of the entire chain since inception and broadcast their own transactions. In order to be recorded to the Bitcoin time chain, transactions are bundled into blocks, which are timestamped by miners every 10 minutes on average.
In 2010, the creator of Bitcoin, Satoshi Nakamoto, introduced a maximum block size of 1 Mb in order to prevent spam, effectively limiting the number of transactions that can fit into a block. While this was not an issue during Bitcoin’s infancy when blocks were mostly empty, as the number of users increased, the future viability of the network was called into question and in 2015 the Bitcoin community erupted in debate over whether or not to raise the block size limit.
At the time, the majority of the Bitcoin industry and a large portion of the community supported an increase of the maximum block size to allow for greater transaction capacity at the base layer, while a resilient minority opposed the proposal. For this subset of the community, scaling and other experimentations would have to happen in the form of second layer payment solutions such as the Lightning Network so as to not compromise Bitcoin’s decentralization. Indeed, increasing the block size would prevent many users from running their own Bitcoin node due to higher hardware requirements.
Additionally, this change to the protocol’s rules would cause a backwards-incompatible update called a hard fork. This would cause two Bitcoin networks to compete in parallel and transactions from that point onwards would only be recorded in one of the two networks.
Most of the miners and exchanges as well as some key Bitcoin developers supported the increase in block size. Miners were believed to be powerful actors in the network, capable of dictating the rules and able to force all users to upgrade to the version of Bitcoin they supported. In an open letter published on the 24th of August they declared:
Our companies will be ready for larger blocks by December 2015 and we will run
Industry letter in support of BIP-101
code that supports this.
The events that would follow would be the first real threat to Bitcoin’s decentralization, coming from within the community itself.
The Blocksize War
In these early stages of the conflict, it seemed clear that the large blockers were winning the war and making progress. They appeared to have a clear, simple message and the majority of users on their side.
In his book published in 2021, Jonathan Bier looks back at the events of the conflict which would later be nicknamed The Blocksize War. He gives a nuanced and thorough account of the complex issues surrounding the debate which did ultimately result in an increase in block size with the SegWit soft fork, as well as multiple failed hard forks including Bitcoin Cash and Bitcoin SV.
Bier immersed himself in the block size debate, having attended many of the scaling conferences and meetings and closely followed online discussions. The result is a thoroughly researched book with first-hand and real-time accounts of the timeline of events as they unfolded.
The Blocksize War is the best resource available to familiarize yourself with the intricacies of this multi-faceted issue, covering key topics that can be hard to grasp for newcomers:
- Who makes and enforces the rules of Bitcoin?
- What power do miners and mining pools hold over the network?
- How are updates and upgrades to Bitcoin implemented?
Decentralized
Decentralization is a feature that is hard to measure, and as a result a lot of “cryptocurrencies” proudly brand themselves decentralized. However just like fiat currencies, these “crypto” projects are led by a company, foundation or some type of leader or central committee which can force any changes to its users, including to the consensus rules or the monetary policy.
Bitcoin, however, is built different. The scaling debate was ultimately resolved from the bottom up, with the node-running users acting in their own self interest and dictating their consensus rules to miners and other industry players, setting apart Bitcoin as being the only decentralized monetary network.
- Purchase The Blocksize War from Amazon
- Read The Blocksize War – Chapter 1 – First Strike on Bitmex blog.
- Watch Bitcoin Q&A: SegWit, Scaling, and Consensus with Andreas Antonopoulos
Posted at block 775740
Bitcoin Bumblebee 
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