BLOCKWARS

A generation of crypto users is growing up with no knowledge of the year-long scaling spat that split the Bitcoin community in two – and then did the same to its blockchain. In 2017, Bitcoin came to a fork in the road, and while the path it ultimately took is now looked upon as inevitable, it was a close-run thing that could have easily gone the other way.

Historical battles are rarely clean. They’re chaotic affairs, characterised by simmering discontent culminating in a short, sharp showdown. That’s how it played out in Bitcoin’s so-called Block Wars, which had been rumbling on for years and reached their climax in 2017.

In short, there were two factions with diametrically opposed views on how the Bitcoin protocol should be scaled. Big Blockers argued for larger blocks – as much as four or eight times the current 1MB limit – while Small Blockers advocated more efficient block structuring and Layer-2 solutions that would free up block space.

The Big Blocker approach, recollects trader and analyst Tone Vays, “ultimately became nearly impossible to achieve because it required every single user to upgrade the code to a bigger block,” whereas “The SegWit approach focused on scaling without changing the block size limit.”

Just to add another layer of complexity to the debate, Big Blockers largely favoured BTC being used as digital currency, while Small Blockers saw BTC as digital gold that they would rather hoard. Given that holding BTC doesn’t take up block space, while spending it does, it’s easy to see why the factions split this way and why their opposing views weren’t easily reconciled.

Battle of the Blocks

The showdown was scheduled for August 1st, 2017 when UASF BIP-148 would force SegWit’s activation. What made this upgrade user-led was that instead of miners deciding whether to adopt SegWit, the users running nodes would set the new rules and leave it to the miners to fall in line or get left behind.

Thereafter, any Bitcoin block that didn’t signal support for SegWit would be rejected by BIP148-enforcing nodes. This would either pressure miners to start following the UASF chain, thereby activating SegWit, or ignore it, causing a chain split.

As summer 2017 reached its apotheosis, tension was high in the Bitcoin community. They’d faced plenty of battles in the past, but those were from external forces. Now, Bitcoin’s internecine conflict threatened to tear it apart from within.

The armies that assembled that summer can be grouped into camps based not just according to ideologically, but also geography. Chinese-led pools such as Bitmain’s Antpool, BTC.com, and ViaBTC were strongly against SegWit. Bitcoin Core developers, responsible for working on the most popular Bitcoin client, largely supported SegWit, and mining pools Bitfury and Slush Pool eventually aligned with them.

But the frontlines for the conflict extended far beyond Bitcoin mining pools and developers. The dispute also impacted exchanges, which would need to coordinate deposits and withdrawals around the time of the fork, as well as users, who were warned against using the network in the hours surrounding SegWit’s activation. Notably, many major exchanges initially refused to support the would-be Bitcoin Cash fork, before later reversing course in response to user pressure.

As the battlelines were drawn, a groundswell of community support formed around BIP148. Social media users began rallying under the slogan “UASF,” with then-Blockstream CSO Samson Mow going so far as to produce UASF baseball caps as a symbol of the movement. It was no longer merely miners signalling their support for the looming fork.

“I recall a feeling of anticipation as the date drew nearer,” says Samson Mow. “Overall, the Bitcoin community was not in a good state of mind at the time as the conflict was drawn out and many were depressed that Bitcoin was being attacked in this way, and by powerful companies.”

“I was always confident that the Big Blockers would lose,” he adds, having predicted as much on Twitter at the time. “From the get-go, there was always a bluff running on the mining side: the Big Block mining pools couldn’t risk forking Bitcoin, despite threatening to do so.”

In the event, the fork itself passed without a hitch as SegWit was smoothly activated and the Bitcoin network continued faithfully producing blocks, just as it had since its inception. The real drama arrived a few weeks earlier, when a plot twist prevented the looming chain split. As the UASF approached, mining pools moved to activate SegWit on their own terms under a separate proposal – BIP91. Within days, it achieved the required 80% signalling rate and locked in. From July 21st, all newly mined blocks had to signal SegWit or else they’d be rejected by miners themselves. It was a fait accompli.

When the dust settled on August 1st, 2017, the majority of the Bitcoin community were jubilant. The event quickly acquired the moniker of Bitcoin Independence Day, when ordinary users gained emancipation from the Big Blockers.

But the Big Blockers and the mining pools they controlled weren’t done with Bitcoin, and even as the community toasted the UASF, they were plotting their revenge.