Over the past year or two, the block size debate has become one of bitcoin’s most important political issues. Although some still view this as nothing more than a technological upgrade, the reality is the root cause of contention in the matter has quite a bit to do with politics. After all, someone who does not much care for decentralization could theoretically contend that scalability is not an issue at all. If they do not see a problem with a few nodes processing all bitcoin transactions, then why would they care about whether or not a kid in the Philippines has the ability to run a full node? Of course, one could argue that line of thinking should cause someone to question why they got involved with bitcoin in the first place.
There is a wide range of different opinions on what should be done with the block size, but the general consensus seems to be that “something” needs to be done. Some believe that the block size should be increased to 20 MB, while others find that increase to be too drastic of a change. Others do not see the need for a maximum block size limit to exist at all. It’s vital to listen to as many views on the matter as possible before coming to your own conclusions, which is why we’ve put together this list of seven opinions from some of the most well-respected individuals in the bitcoin ecosystem.
Gavin Andresen’s views on the block size limit should be clear to anyone in the bitcoin space at this point. He has been the one pushing for a block size increase as soon as possible, and he’s been trying to gain consensus around a change to a 20 MB block size limit -- especially over the past few months. Andresen also understands that it takes six months to a year to completely roll out this kind of change, which is why he is pushing so hard for the change right now. The Bitcoin Foundation Chief Scientist is aware of other possible solutions to scalability, but he’d like to see a few different options tried rather than hoping for one to get the job done. Andresen’s thought process on this matter can be summed up by one of his statements on a recent episode of Let’s Talk Bitcoin:
“I want to see as many people using bitcoin as possible, and I want to see transaction fees as low as possible.”
2. Peter Todd (Bitcoin Core developer, works on many bitcoin-related projects)
Many have viewed Peter Todd as the leading voice against Andresen’s proposal, but some of his views may also have been misunderstood in the greater bitcoin community. Todd has been explaining the rather political nature of the bitcoin development process for quite some time, and he clearly understands the implications of raising the bitcoin block size to an amount such as 20 MB. One of his main concerns is that this sort of block increase policy does nothing more than “kick the can down the road.” His concerns sound quite similar to politicians who are routinely opposed to raising the debt ceiling in the United States for similar reasons.
In the same recent episode of Let’s Talk Bitcoin that featured Gavin Andresen, Todd also laid out his concerns with a block size limit increase in terms of regulation. He pointed out that regulators may want to try to regulate the bitcoin blockchain itself -- in addition to the entry and exit points -- and such ambitions are more realistic with a larger block size that involves less people running full nodes and doing their own mining (rather than in a pool).
At the end of the day, Todd clearly sees this as an issue of politics where people are choosing between scalability and decentralization. Although Todd would rather see other solutions to scale bitcoin over the long term (such as the Lightning Network), it’s unclear if those will be ready to be used by the time the block size issue becomes a serious problem. During his Let’s Talk Bitcoin interview, Todd also stated:
“I -- like many other people -- think that eventually (potentially many years down the road) there may become broad consensus to do a block size limit increase. But right now we just don’t have that consensus.”
3. Greg Maxwell (Blockstream Co-Founder, Bitcoin Core developer with commit access)
Gregory Maxwell may be the most widely-respected Bitcoin Core developer. He’s been heavily involved with the development process since 2011, and he’s come up with many interesting ideas (StorJ, two-way pegging, etc.) that have captured the minds of bitcoin advocates. Maxwell has not been extremely public about his positions on certain topics in the past, but he recently sent a message to the bitcoin development mailing that explained many of his thoughts on the block size increase.
In his message, Maxwell was quick to explain that a block size increase would have serious implications on the bitcoin development process. He noted:
“We're talking about turning one of the fundamental scarcities of the Bitcoin Economy and cryptosystem -- leaving the comfort of ‘rule by math’ and venturing into the space of political decisions.”
Maxwell also explained that this debate illustrates the ideological differences between various participants in the bitcoin ecosystem. For example, he noted that individuals are essentially debating whether bitcoin is supposed to be a digital gold or a competitor to Square. Maxwell seems to have the same sort of concerns regarding centralization and regulation as Peter Todd.
4. Mircea Popescu (Operator of MPEx)
Mircea Popescu has gone as far as to say that Gavin Andresen’s proposal essentially creates an altcoin -- Gavincoin. Popescu is one of the better known critics of increasing the block size at all, but his words are sometimes overlooked -- perhaps due to contentious nature of some of his writings. For example, he shared some of his thoughts on Gavin Andresen earlier this year:
“This will be useful for the Bitcoin network first and foremost, because Gavin is, by and large, a mentally retarded doofus displaying a shocking amount of Dunning-Kruger syndrome in his assorted dabblings in economics and other hard fields.”
In a different post from January, Popescu compared Gavincoin to “MtGox coins, Aurora coins, Etherium coins, Ripple coins, and Paycoins.” Later in that same post, Popescu explained why any hard fork that increases the block size limit is destined for failure:
“The fate of this fork will be exactly the fate of all attempted forks to date : the savvy Bitcoin holders will sell their fake-Bitcoins on the fake network, while double-spending (and thus invalidating) their sale on the actual network, thereby keeping their actual Bitcoin safe (iv). The proceeds of this "victimless" (v) crime will be used to purchase more legitimate Bitcoins on the legitimate network, thus draining away value from the holders of Bitcoin fakes, into the pockets of the legitimate Bitcoin holders.”
He ends the post by essentially declaring war on Gavincoin.
5. Brian Armstrong (Co-Founder and CEO of Coinbase)
The interesting thing about Coinbase is that they already do many of their transactions off the blockchain. Whenever a Coinbase user is transacting with another Coinbase user, the company can simply change their own, internal record, rather than broadcasting anything on the blockchain. This ability to remove transactions from the blockchain is cheered by some individuals in the bitcoin community, but it’s also routinely bashed by others who see it as nothing more than another step down the road towards centralization.
Some have even argued that Coinbase would benefit from a block size that doesn’t change due to the position that it would put them in as one of the “central banking institutions” of bitcoin. Having said that, Coinbase Co-Founder and CEO Brian Armstrong has publicly stated his support for raising the block size via Andresen’s proposal. Ironically, his view is that the current block size will lead to more centralization than increasing the limit:
And small block sizes will net/net increase centralization right now, making in-network (off blockchain, same thing) txns more attractive— Brian Armstrong ϟ (@brian_armstrong) May 9, 2015
6. Justus Ranvier (Conceptual Design and Communication at Monetas)
Justus Ranvier has one of the more interesting opinions on the bitcoin blockchain that doesn’t seem to get much attention. In his view, there is no need for the block size limit to exist at all. In a blog post published in January of this year, Ranvier made the case that limiting the block size is a form of central planning. He noted:
“Since its inception, Bitcoin has been operating as if there was no block size limit at all. If this limit is kept in place when the market demand for transactions rises above 1 MB/10 minutes, then suddenly Bitcoin will be in uncharted economic territory.”
Critics of Ranvier’s theories may be quick to point out that the block size limit needs to remain somewhat low in order to bring more fees to the miners who are supporting the network. Ranvier’s response to this is quite simple. He claims:
“The space in a block will always be scarce as long as our computers are still made of matter and still occupy space. Constructing a block isn’t free, storing a block isn’t free, and the bandwidth needed to transmit a block is not free.”
Ranvier also admits that the costs he is referring to may not be large, but the point he is making is that the costs aren’t zero. A number of other possible criticisms are also addressed by the end of the post.
7. Jeff Garzik (BitPay Co-Founder, Bitcoin Core developer with commit access)
It’s clear that Jeff Garzik sees the argument for raising the bitcoin block size, but he also doesn’t seem to believe that the blockchain should be used to broadcast every transaction in the world. As he wrote in a February 2012 message on the bitcoin development mailing list, “Bitcoin is a settlement system, by design.” Garzik went on to explain, “It is foolish to think the entire world will connect directly to the P2P block network and broadcast all the morning coffees to all the miners.” Garzik would like to see the majority of payments take place on layers above the bitcoin blockchain, which means the block size increase should not be viewed as the only solution to scalability.
Hopefully this post was able to shed some light on the level of difficulty involved with coming to consensus on fundamental changes to the bitcoin protocol. Andresen has decided to take his efforts to the next level by threatening to join Mike Hearn’s Bitcoin-XT fork of the Bitcoin Core client, but whether or not that fork will gain consensus is still up in the air. After all, one man can’t make all of the decisions in a decentralized system.
So which of the opinions do you think will win out in the end? Share with us your opinions as we would love to hear them!