Original title: Some reflections on the Bitcoin block size war
Original author: Vitalik Buterin, founder of Ethereum

Original translation: Maodi, Wu Shuo Blockchain

Recently, I finished reading (or rather, listened to) two major history books that record the great Bitcoin block size war of the 2010s, and these two books represent two opposing views:

●Jonathan Bier’s "The Blocksize War", which tells the story from the perspective of those who support small blocks

●Roger Ver and Steve Patterson’s "Hijacking Bitcoin", which tells the story from the perspective of those who support large blocks

It was fascinating to read these two history books that record events that I personally experienced and participated in to some extent. While I’m well-informed about most of what happened and both sides’ narratives about the nature of the conflict, there were some interesting details that I didn’t know or had completely forgotten, and it was fun to see the situation in a new light. At the time, I was a “big blocks guy,” but I was a pragmatic moderate blocker, opposed to extreme increases or absolutist statements that fees should never rise significantly. So do I still support my views at the time? I look forward to seeing and finding out.

How do small blockers view the block size war in Jonathan Bier’s narrative?

The original debate in the block size war revolved around a simple question: Should Bitcoin increase the block size limit from the then-current 1MB to a higher value via a hard fork to allow Bitcoin to process more transactions, thereby reducing fees, but at the cost of making it harder and more expensive to run and validate nodes on the blockchain network?

“[If the blocksize was much larger], you’d need a large datacenter to run a node, and you wouldn’t be able to run it anonymously.” — This is a key argument made in a video sponsored by Peter Todd, advocating for keeping the blocksize small.

The impression I get from Bier’s book is that while small blockers do care about this specific issue, and prefer to be conservative and increase the blocksize by only a little to ensure that running a node remains easy, they are more concerned about the higher-level issue of how protocol-level issues are decided. In their view, protocol changes (especially “hard forks”) should be very rare and require a high degree of consensus among the protocol’s users.

Bitcoin is not trying to compete with payment processors — there are already plenty of those. Instead, Bitcoin is trying to be something more unique and special: an entirely new type of money, uncontrolled by a central organization and a central bank. If Bitcoin ever began to have a highly active governance structure (which would be necessary to handle controversial adjustments to the block size parameter) or became susceptible to coordinated manipulation by miners, exchanges, or other large companies, it would forever lose this valuable unique advantage.

In Bier’s narrative, big blockers cause the most discomfort to small blockers precisely because they often try to get a relatively small number of big players together to legitimize and push their preferred changes — something that runs completely counter to small blockers’ views on how governance should be done.

The New York Agreement was signed in 2017 by major bitcoin exchanges, payment processors, miners, and other companies. Small blockers see it as a key example of an attempt to transform bitcoin from user rule to corporate rule.

How do the big blockers view the block size war in Roger Ver’s narrative?

The big blockers usually focus on a key specific question: What exactly should Bitcoin be? Should it be a store of value - digital gold, or a means of payment - digital cash? For them, it was clear from the beginning that the original vision and the vision that all big blockers agree on was digital cash. This is even explicitly mentioned in the white paper!

The big blockers also often cite two other works of Satoshi Nakamoto:

1. The simplified payment verification section in the white paper, which discusses that when blocks become very large, individual users can use Merkle proofs to verify that their payments are included without verifying the entire chain.

2. A passage on Bitcointalk, advocating a gradual increase in block size via hard fork:

For them, the shift from a focus on digital cash to digital gold is a shift that was agreed upon by a small but tight-knit group of core developers, who then felt that because they had discussed the issue internally and reached a conclusion, they had the right to impose their views on the entire project.

The small blockers did propose a solution where Bitcoin could be both cash and gold at the same time - that is, Bitcoin becomes the "first layer" focused on being gold, while "second layer" protocols built on top of Bitcoin, such as the Lightning Network, provide cheap payments without using the blockchain for every transaction. However, these solutions are so inadequate in practice that Ver spends several chapters criticizing them in depth. For example, even if everyone switched to the Lightning Network, the block size would eventually need to be increased to accommodate hundreds of millions of users. In addition, trustlessly receiving coins in the Lightning Network requires having an online node, and to ensure that your coins are not stolen, you need to check the chain once a week. These complexities, Ver argues, will inevitably push users to interact with the Lightning Network in a centralized manner.

What are the key differences in their views?

Ver’s description of the specific debate aligns with that of the small blockers: both sides agree that the small blockers value the ease of running a node, while the big blockers value low transaction fees. They both acknowledge that legitimate differences in beliefs are key factors in the debate.

But Bier and Ver’s descriptions of most of the deeper issues are very different. For Bier, the small blockers represent users against a small but powerful group of miners and exchanges trying to control the blockchain network for their own benefit. Small blockers keep Bitcoin decentralized by ensuring that ordinary users can run nodes and validate the blockchain network. For Ver, big blockers represent users against a small group of self-appointed high priests and venture-backed companies (i.e. Blockstream) that profit from second-layer solutions that are necessary for the small block roadmap. Big blockers keep Bitcoin decentralized by ensuring that users can continue to afford on-chain transaction fees without relying on centralized second-layer infrastructure.

The closest I see to "agreeing on the terms of the debate" is that Bier's book acknowledges that many big blockers are well-intentioned, and even acknowledges their legitimate dissatisfaction with small blocker forum moderators blocking opposing views, but frequently criticizes big blockers for incompetence, while Ver's book is more inclined to attribute malicious intent and even conspiracy theories to small blockers, but rarely criticizes their ability. This reflects a common political trope I have heard on many occasions, that "the right thinks the left is naive, and the left thinks the right is evil."

How do I think about the block size war? How do I think about it now?

Room 77, a restaurant in Berlin that once accepted Bitcoin payments, is the center of the Bitcoin District, where a large number of restaurants accept Bitcoin. Unfortunately, the dream of Bitcoin payments faded in the second half of the decade, and I think rising fees are a key reason.

In my personal experience with the Bitcoin block size war, I generally side with the big blockers. My support for the big blockers focuses on a few key points:

· A key original purpose of Bitcoin is digital cash, and high fees could kill this use case. While second-layer protocols could theoretically offer lower fees, the entire concept is not well-tested, and it is highly irresponsible for the small blockers to insist on a small block roadmap when they know little about the actual effects of the Lightning Network. Today, actual experience with the Lightning Network makes the pessimistic view more common.

· I am not convinced by the "meta-level" arguments of the small blockers. The small blockers often claim that "Bitcoin should be controlled by users" and that "users do not support large blocks", but they are never willing to clearly define who "users" are or how to measure user willingness. The big blockers implicitly propose at least three different ways to calculate users: computing power, public statements by well-known companies, and social media discussions, and the small blockers deny each of these ways. The big blockers did not organize the New York Agreement because they liked "groups", but because the small blockers insisted that any controversial changes required consensus among "users", and signing a statement of major stakeholders was the only practical way for the big blockers to do so.

· Segregated Witness was a proposal for a slightly increased blocksize adopted by the small blockers that was unnecessarily complex relative to a simple hard fork increase. The small blockers eventually developed a mantra of "soft forks are good, hard forks are bad" (which I strongly disagree with), and designed their blocksize increase to accommodate this rule, though Bier admits that this introduced significant complexity that many big blockers could not understand the proposal. I feel that the small blockers were not just "cautious", they were arbitrarily choosing between different types of caution, choosing one (no hard fork) at the expense of another (keeping the code and specs clean and simple) because it suited their agenda. Eventually, the big blockers also gave up on "clean and simple" and moved on to ideas like Bitcoin Unlimited's adaptive blocksize increase, which Bier (rightfully) heavily criticized.

· Small blockers do engage in very uncool social media censorship to impose their views, culminating in Theymos’ infamous quote: “If 90% of /r/Bitcoin users find these policies intolerable, then I expect 90% of /r/Bitcoin users to leave.” p.s.: “/r/” is Reddit’s way of saying subreddits.

Even relatively mild pro-big block posts are frequently deleted. Custom CSS is used to make these deleted posts invisible.

Ver’s book focuses on points 1 and 4, and part of point 3, while also offering some theories of misconduct related to financial motivations — namely that the small blockers founded a company called Blockstream that would build second-layer protocols on top of Bitcoin, while simultaneously advocating the idea that Bitcoin’s first layer should remain restricted, thus making these commercial second-layer networks necessary. Ver doesn’t focus too much on the philosophy of how Bitcoin should be governed, because to him, the answer “Bitcoin is governed by miners” is satisfactory. This is a point I disagree with both the small blockers and the big blockers, and I think that both the vague “we refuse to actually define user consensus” and the extreme “miners should control everything because they have aligned incentives” are unreasonable.

At the same time, I remember being extremely disappointed with the big blockers on some key points, and these points also resonate in Bier’s book. The worst point (both my own and Bier’s) is that the big blockers were never willing to agree to any realistic principle of block size limits. A common view is that "block size is determined by the market" - meaning that miners should decide the block size they want, and other miners can choose to accept or reject those blocks. I strongly disagree with this and point out that this mechanism is an extreme distortion of the concept of "market". Ultimately, when the big block faction split into their own independent chain (Bitcoin Cash), they finally abandoned this view and set a 32MB block size limit.

At the time, I actually did have a principled approach to deciding the block size limit. To quote one of my posts from 2018:

"Bitcoin maximizes the predictability of the cost of reading the blockchain while assuming the lowest possible predictability of the cost of writing to the blockchain, resulting in very good performance on the former metric and catastrophic performance on the latter. Ethereum, with its current governance model, achieves a medium predictability in between."

I later repeated this point in a tweet in 2022. Essentially, the philosophy is that we should strike a balance between increasing the cost of writing to the chain (i.e. transaction fees) and the cost of reading the chain (i.e. software requirements for nodes). Ideally, if demand for using the blockchain increases 100x, we should split the pain in half and have 10x more blocks and 10x more fees (transaction fees have a demand elasticity close to 1, so this is mostly feasible in practice).

Ethereum actually did take a medium block approach: since launch in 2015, the capacity of the chain has increased by roughly 5.3x (perhaps 7x if calldata repricing and blobs are included), while fees have increased from almost nothing to a significant but not too high level.

However, this compromise-oriented (or "concavity") approach has never been accepted by either faction; it may have felt too "centrally planned" to one, too "vague" to the other. I feel that the big blockers are more at fault here than the small blockers; the small blockers were willing to modestly increase the blocksize in the beginning (e.g. Adam Back's 2/4/8 plan), but the big blockers were unwilling to compromise, quickly moving from advocating a single increase to a specific large number to an overarching philosophy that almost any non-trivial limit on the blocksize is illegal.

The big blockers also began advocating that miners should be in control of Bitcoin — a philosophy Bier effectively criticizes by pointing out that if miners tried to modify the protocol rules to do something other than increase the block size, like give themselves more rewards, they would probably quickly abandon their views.

One of the main criticisms of the big blockers in Bier’s book is their repeated displays of incompetence. Bitcoin Classic was poorly coded, Bitcoin Unlimited was unnecessarily complex, for a long time they did not include erasure protection and did not seem to understand that this choice greatly weakened their chances of success (!!), and they had serious security vulnerabilities. They loudly called for multiple implementations of the Bitcoin software — a principle I agree with and that Ethereum has also adopted — but their “alternative clients” were really just forks of Bitcoin Core that changed a few lines of code to implement the block size increase. In Bier’s narrative, their repeated missteps in code and economics led to more and more supporters leaving over time. They were further discredited by the fact that the main big blockers believed Craig Wright’s false claims to be Satoshi Nakamoto.

Craig Wright, a fraud pretending to be Satoshi Nakamoto. He often uses legal threats to take down criticism, which is why MyFork is the largest online copy of the Cult of Craig repository, which documents the evidence that he is a fraud. Unfortunately, many big blockers fell for Craig because Craig catered to the big blockers' claims and said what the big blockers wanted to hear.

Overall, from reading both books, I found myself agreeing more often with Ver on the macro issues, but more often with Bier on the specifics. It seems to me that the big blockers are right on the central issue that blocks need to be larger, best achieved by a simple and clean hard fork as described by Satoshi, but the small blockers make fewer embarrassing technical mistakes and have fewer cases where their positions lead to ridiculous results.

The Block Size War Is a One-Sided Capability Trap

The overall impression I got from reading these two books is a political tragedy that I feel is common in a variety of contexts, including cryptocurrencies, companies, and national politics:

One side monopolizes all the capable people, but uses its power to promote narrow and biased views; the other side correctly recognizes the problem, but is immersed in the focus of opposition and fails to develop the technical capabilities to implement its own plans.

In many of these cases, the first group is criticized as authoritarian, but when you ask its (usually many) supporters why they support it, their answer is that the other side only complains; if they really came to power, they would completely fail within a few days.

To some extent, this is not the fault of the opposition: it is difficult to become good at execution without a platform to execute and accumulate experience. But what was particularly evident in the block size debate was that the big blockers didn’t seem to realize the need for executional competence at all — they thought they could win simply by being right about the block size issue. The big blockers ultimately paid a heavy price for their focus on opposition rather than building: even when they forked into their own chain (Bitcoin Cash), they split twice more in a short period of time before the community finally stabilized.

I call this problem the one-sided competence trap. It seems to be the fundamental problem facing any person trying to build what they hope is a democratic or pluralistic political entity, project, or community. Smart people want to work with other smart people. If two different groups are roughly evenly matched, people will tend to choose the side that is more in line with their values, and this balance can be stable. But if the tendency is too one-sided, it will enter a different equilibrium state and it seems difficult to recover. To some extent, the opposition can mitigate the one-sided competence trap by being aware of the problem and consciously cultivating competence. Often, the opposition movement does not even get to this point. But sometimes it is not enough to just be aware of the problem. We would benefit greatly from stronger and more in-depth ways to prevent and escape the one-sided competence trap.

Less Conflict, More Technology

In reading both books, one inconvenient omission stands out more than anything else: the term “ZK-SNARK” appears completely absent from either book. There is little excuse for this: even by the mid-2010s, ZK-SNARKs and their potential for scalability (and privacy) were already well known. Zcash launched in October 2016. Gregory Maxwell briefly explored the scalability implications of ZK-SNARKs in 2013, but they seem to have been completely absent from discussions of Bitcoin’s future roadmap.

The ultimate way to ease political tensions is not compromise, but new technology: discovering radical new ways to give both sides more of what they want at the same time. We’ve seen several instances of this in Ethereum. A few examples that come to mind are:

· Justin Drake’s push for BLS aggregation allows Ethereum’s proof-of-stake to handle more validators, thereby reducing the minimum staked balance from 1500 to 32 with little downside. Recent progress on signature consolidation is expected to push this further.

· EIP-7702 implements the goals of ERC-3074 in a way that is significantly more compatible with smart contract wallets, helping to ease long-standing controversy.

· Multidimensional Gas, starting with its implementation on blobs, has helped increase Ethereum’s ability to accommodate rollup data without increasing the worst-case block size, thereby minimizing security risks.

When an ecosystem stops embracing new technologies, it inevitably stagnates and becomes more contentious: political debates about “I get 10 more apples” and “you get 10 more apples” are inherently less contentious than debates about “I give up 10 apples” and “you give up 10 apples.” Losses are more painful than gains, and people are more willing to break their shared political rules to avoid losses. This is a key reason why I am very uncomfortable with degrowth and the view that “we can’t solve social problems with technology”: there are quite good reasons to believe that fighting over who gets more, rather than fighting over who loses less, is indeed more conducive to social harmony.

In economic theory, there is no difference between the two prisoner’s dilemmas: the game on the right can be seen as the game on the left plus an independent (irrelevant) step in which the players lose four points no matter how they act. But in human psychology, the two games can be very different.

A key question for Bitcoin’s future is whether it can become a technologically forward-looking ecosystem. The development of Inscriptions and later BitVM creates new possibilities for second layers, improving upon what Lightning can do. Hopefully, Udi Wertheimer’s theory that ETH getting an ETF means the end of Saylorism and a renewed understanding that Bitcoin needs to improve technically.

Why do I care?

I care about analyzing Bitcoin’s successes and failures not to disparage Bitcoin and elevate Ethereum. In fact, as someone who enjoys understanding social and political issues, I think one of the things about Bitcoin is that it is sociologically complex enough to generate such rich and interesting internal debates and divisions that two entire books could be written about them. Rather, I care about analyzing these issues because Ethereum and other digital (and even physical) communities I care about can learn a lot from understanding what happened, what went well, and what could be done better.

Ethereum’s focus on client diversity stems from observing Bitcoin’s failures due to having only one client team. Its version of a second-layer solution stems from an understanding of how Bitcoin’s limitations lead to limitations on what kind of trust properties a second layer can have built on top of it. More broadly, Ethereum’s explicit attempt to foster a diverse ecosystem is largely an attempt to avoid the one-sided capability trap.

Another example that comes to mind is the cyber-state movement. Cyber-states are a new digital separation strategy that allows communities with similar values to build their visions of the cultural and technological future, freed to some extent from the constraints of mainstream society. But the experience of Bitcoin Cash (after the fork) shows that movements that fork to solve problems have a common failure mode: they may split again and again and never truly work together. The lessons of the Bitcoin Cash experience extend far beyond Bitcoin Cash itself. Like rebellious cryptocurrencies, rebellious cyber-states need to learn how to actually execute and build, not just throw parties, share vibes, and tweet memes comparing modern brutalism to 16th century European architecture. Zuzalu is part of my own attempt to drive this change.

I recommend reading Bier’s The Blocksize War and Patterson and Ver’s Hijacking Bitcoin to understand a defining moment in Bitcoin’s history. In particular, I recommend reading both books with a mindset that isn’t just focused on Bitcoin — rather, this is the first truly high-stakes civil war for a “digital nation,” and the experiences offer important lessons for other digital nations we’ll be building in the coming decades.

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