One of the most important debates in the history of blockchain is known as the “Blocksize War.” Most Bitcoiners and crypto enthusiasts have heard of it, even if they don’t fully understand what it means. Early in the history of the Bitcoin network, the size limitations of blocks in the blockchain became a huge point of contention — one that partially continues to this day.
Many network upgrades and proposed solutions have promised to solve the issues of block size on the Bitcoin protocol. While the Bitcoin block size war is technically over, many of the same themes are still prevalent today when Bitcoin users posit on the future of blockchain and Bitcoin core.
The Origins of Bitcoin’s Blocksize War: Contentions about Bitcoin Block Size Limit
The Blocksize War era was mainly from 2015-2017 as the debate raged about whether Bitcoin’s blocksize limit of 1MB should be increased.
The original block size limit of 1MB was imposed by Satoshi Nakamoto (the anonymous creator of Bitcoin), as a protective measure in the early days to prevent potential spam attacks on the network.
As Bitcoin gained popularity and more people started using the network for Bitcoin transactions, the 1 MB limit started showing its drawbacks. Network congestion slowed down transaction speeds and significantly drove up fees. The block’s small size limited the amount of data, and therefore the number of transactions, that could be included in each block.
It became clear to everyone that scalability solutions were desperately needed. But the theoretical and technical dispute about whether increasing the blocksize could be a good solution was a severe point of contention.
Out of the conflict emerged two camps — Small Blockers and Big Blockers. The main position of each camp is implied in its name, but there are nuances to each.
Big Blockers: The Argument for a Bigger Block Size Limit
Big Blockers advocated for larger block sizes on Bitcoin for several key reasons.
- Scalability: This is the main argument Big Blockers had for wanting larger block sizes because it would increase capacity for processing more transactions per block. This would relieve network congestion and lower transaction fees.
- Improved user experience: Big Blockers wanted faster confirmation times for transactions for a better user experience. This would be particularly helpful for merchants and businesses that rely on quick and affordable on-chain transactions.
- Mass adoption: Larger blocks would allow Bitcoin to onboard more users, making it accessible to more of the world. Mass adoption aligns with the original vision of Bitcoin as a peer-to-peer electronic cash system.
- Market competitiveness: If Big Blockers wanted Bitcoin to stay competitive with other blockchains, they see the need for a higher number of transactions per second. Increasing block size would help Bitcoin keep its position as the top blockchain.
- Miner revenue: Many argued that larger blocks may lead to increased transaction fees for miners, potentially incentivizing more miners to secure the network. More miners could mean improved security and decentralization.
Small Blockers: Why keep Bitcoin to 1MB?
On the other end of the spectrum, Small Blockers had valid reasons for their insistence on maintaining block size limitations.
- Decentralization: Small Blockers argued that smaller block sizes kept the network decentralized — a key principle of blockchain. Limiting block sizes, they argued, could make it feasible for more individual users to run full nodes, increasing decentralization as a result.
- Security: They also argued that smaller blocks could contribute to the security of the network. A smaller block size could reduce the risk of centralization or concentration of mining power and control in the hands of a few large players.
- Deliberation around protocol changes: Small Blockers often took a measured approach to protocol changes. They believed that drastic or unproven changes could introduce new vulnerabilities or create unexpected complications in the network.
- Network resilience: Keeping block sizes limited ensures the resilience of the network. Smaller blocks allow Bitcoin to function even in regions with limited internet bandwidth, making the cryptocurrency accessible to a more diverse and global user base.
- Off-chain solutions: Small Blockers preferred L2 solutions like the Lightning Network to address scalability issues. Off-chain solutions create more scalable ways to increase transactions while preserving security and decentralization on the main blockchain.
Proposed Solutions: From Bitcoin Cash to SegWit
Both sides of the Blocksize War presented valid arguments for their positions. That made finding a solution that satisfied both parties virtually impossible. But during the course of the blocksize war, a number of solutions were proposed, some of which have lasted even until today.
- Bitcoin XT was a Bitcoin client developed in 2015 by Mike Hearn and Gavin Andresen. It aimed to increase the block size limit to 8MB. However, XT faced fervent opposition from the Bitcoin community. Ultimately, XT couldn't gain widespread adoption.
- Bitcoin Classic launched in 2016 by Bitcoin developer Tom Zander. It proposed a block size increase to just 2MB. But like Bitcoin XT, it failed to gain consensus and support from the community.
- Bitcoin Cash (BCH) proposed increasing the block size to 8 MB to provide faster, cheaper transactions. But disagreements and a hard fork resulted in the creation of both Bitcoin (BTC) and Bitcoin Cash (BCH), which are now separate cryptocurrencies.
- Segregated Witness, or SegWit, was a pivotal solution implemented in 2017. It separated transaction data from the signature data, increasing transaction capacity without a block size increase.
The New York Agreement (or SegWit2x agreement) was a compromise proposed in 2017. It intended to address the ongoing scaling debate by activating SegWit and increasing the block size to 2MB.
However, the agreement still caused controversy and the hard fork aspect, which would have increased the block size to 2MB, was canceled. SegWit was ultimately activated through a User-Activated Soft Fork (UASF) and the block size remained at 1MB.
Some believe the results show that Small Blockers won the Blocksize War, others disagree. In truth, the ultimate outcome has been a constant effort and emphasis in the community on scalability solutions that make Bitcoin more functional.
The Legacy of Bitcoin’s BlockSize War: Scaling Bitcoin and Bitcoin’s Block Size
While the Blocksize War from 2015 to 2017 concluded with Bitcoin's block size limit remaining at 1MB and the agreement to implement SegWit, the debate over Bitcoin's scalability continues and its legacy is still felt to this day.
In fact, some of the most technically innovative scaling solutions — like layer-2 solutions — have come about because of restricted block sizes. The Lightning Network, one of the most signification L2 solutions for Bitcoin, is an example of this, as SegWit laid the foundation for LN to become a solution sought by many builders today.
But the Blocksize War also had a lasting impact on the Bitcoin community. It highlighted the challenges of governance and decision-making in open-source projects. Consensus is important and projects without a primary leader (or with an anonymous one) need effective ways to propose and implement changes in a way that satisfies the needs and wants of the community. Community members who are working on Bitcoin are still trying to strike the perfect balance between both to further Bitcoin development.
More recently, the debate about block size on the Bitcoin blockchain was renewed again thanks to the launch of the Ordinals protocol. The Ordinal inscriptions that we have come to know and love have taken up a significant amount of block space (they are Bitcoin transactions, after all). This has been the primary argument for community members concerned about Ordinals' longer-term impact, particularly ahead of the 2024 Bitcoin halving event.
The debate over the block size limit led to divisions and heated arguments that are still ongoing within the community. However, slow as they may be, changes and improvements are moving the Bitcoin ecosystem forward.
The Blocksize War was a canary in the coal mine for the Bitcoin scaling solutions we have today. While the battle primarily revolved around block size, it highlighted the critical issue of scalability and what that meant for Bitcoin adoption.
Bitcoiners have developed innovative scaling solutions like SegWit and L2 scaling solutions — and they’re still at it. Even with upgrades and new off-chain protocols, Bitcoin still faces certain scalability hurdles in the future. The Blocksize Wars served to bring these issues into the spotlight where they could, ultimately, be addressed.