The battle for Bitcoin: Cypherpunks (BTC) vs Big Blockers (B2X/Bitcoin Cash)

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The battle so divisive that the November hard fork was called off due to concerns of extreme market turbulence. The conflict is a philosophical one.

The question that is dividing the community is a seemingly trivial one - How can we upgrade the network to accommodate more transactions and therefore, reduce transaction times? Bitcoin transactions are grouped into blocks that get processed every 10min and has a limit of 1MB (an arbitrary cap to prevent initial network spam). The recent surge in Bitcoin transaction volume meant that blocks are filling up too quickly, increasing transaction times and fees.

Laura Shin in her forbes article gave a good analogy of the two proposals to increase transactions, think of each block as a house. One group (Cypherpunks and the core developers of Bitcoin) says, "let's organize the items in the house more efficiently, not everything needs to be in the house so put the less important stuff outside (also known as the Segwit proposal). Another group (Big blockers) says, "Let's just make the house bigger!" (in the case of the hard fork, the proposal is to increase to 2MB or 2X).

Big blockers argue that there's a limit to how efficient we can be, sooner or later block sizes have to increase to accommodate increased transaction volumes as Bitcoin becomes more widely accepted. Cypherpunks argue that increasing the block size will require more computing power to mine each block, marginalizing independent miners and concentrating power in the hands of fewer players with large enough computing power. This effectively undermines a core function of Bitcoin being a peer-to-peer, decentralized network.

The cancellation of the November hard fork suggests that Big Blockers lacked the confidence to be the majority chain and fear that a destabilized Bitcoin will burst the speculative bubble. Lots of big block supporters flocked to Bitcoin Cash (8MB blocks) resulting in a massive price rally, momentarily unseating Ethereum as the 2nd largest crypto. That combined with the New York Agreement, suggests that big blockers actually make up a rather sizable number.

What do you monkeys think? Will one side edge out the other? Or will this stalemate expose fundamental flaws and burst the Bitcoin Bubble? I believe that people will still have faith in Bitcoin and wait for Layer 2 solutions such as the Lightning Network to come about, till then....there'll be a political gridlock between core developers, miners, users and businesses.

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Nov 14, 2017