As we speak, Bitcoin is facing what may be its most serious threat to its existence since it first began to be mined. The battle is over exactly how Bitcoin should grow to be able to fulfill its destiny as a global currency and store of value.
The contenders are Bitcoin Core on one side, a Bitcoin client maintained by those who received the ‘commit’ keys to make changes to the protocol in a direct line from Satoshi Nakamoto. Currently the Core team have developed a protocol known as SegWit which will allow some data not to be stored directly on the blockchain, effectively increasing transaction capacity. SegWit also makes other improvements that will make second-tier protocols possible that can massively increase transaction volume off-chain.
The other side is Bitcoin Unlimited, a contender client developed based on the Bitcoin Core code, but with a few simple changes to it – the most of important of which is that it will allow for bigger blocks, or a much higher throughput of transaction volume than allowed by core. Core’s blocks were limited to 1 megabyte to prevent spamming of the network by Satoshi early on.
Core and BU are locked in a death grip, with SegWit supporters controlling a vast majority of the nodes, and Unlimited supporters controlling a significant amount of mining power.
The sad fact is that these two proposals are not in opposition. Not all scaling can happen on chain if Bitcoin is to achieve true global proportions, and second tier protocols will need more on-chain capacity to really be effective.
Bitcoin Warrior has from the beginning been a supporter of both bigger blocks and SegWit. We also feel that it is a false choice to have to choose between one or the other, and we wish that the core team were clearer with concrete plans to scaling so businesses could continue adopting without worrying about rising miner fees. We also regret that BU did not make any effort to incorporate SegWit into their client. We aren’t familiar with the technical difficulties of doing this, but doing so might have been a show of good faith and allowed for the cooling of tensions.
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At this time, Bitcoin Warrior is running a Core 0.14 node to signal support for SegWit since it is the more technically capable team and the transaction speed improvements to 2mb are sufficient to allow the developers to keep working on further speed increases.
It is our belief that the current battle is a battle for the life of Bitcoin – and this battle has been brought on by a number of factors, including censorship on r/Bitcoin creating hard feelings polarizing the community, bad faith debating by many bitcoiners who resort to name calling and conspiracy spinning, and the intransigence of the people with most influence (Maxwell, Ver, Back, etc) to understand that even if their specific vision of what’s best for Bitcoin may differ, that they have both a sincere desire to see Bitcoin succeed and a great deal invested in getting it to where we are today.
Further, though I am not one to go in for conspiracy theories, I do feel that it’s likely that one or more persons, companies, or governments are adding fuel to the partisan fire raging in the Bitcoin community. All they have to do is step in with hyperbole, name calling, etc. and everyone retreats deeper into their respective corners. This makes coming together, not to agree, but to disagree civilly and with an eye to find a way forward, even more important. The troll on the other side of that tweet is probably not being paid by Roger Ver. but by Goldman Sachs.
As the situation now stands, Bitcoin Unlimited has an advantage with the miners, and Core as a strong advantage with nodes – many of which are run by regular bitcoiners contributing to the network. It will be difficult for BU to reach the 51% of hashing power necessary to fork the chain (likely bringing a lot of confusion as Bitcoin would essentially become two instead of one). And SegWit has been designed to need 95% consensus to activate, a nigh-impossible goal even in the best of circumstances.
It is our prediction, however, that after a stalemate period, one, probably Core, will gain the upper-hand in adoption rate, and then we will see a quick adoption.
And once this boss battle has been won, we will then see that a lot of money waiting on the sidelines will start pouring back into a robust and viable Bitcoin. The price of Bitcoin will start to rise.
So, the only thing holding us back right now is … us.