A Bitcoin Fork Should be Avoided at All Costs

bitcoin tallbitcoin tallAnywhere you look, there seems to be a consensus that something has to change with the size of the Bitcoin blocks. Words like “scaling” come up a lot, and how we must be able to compete with Visa and MasterCard if everyday people are ever going to take Bitcoin seriously.

While this may be true, there are extremists on both sides of the issue. There are some who advocate lowering the block size to 400kb, and there are others who believe a fork will be necessary in spite of those opposed. This could be an astronomically bad situation for Bitcoin. If the majority of miners don’t go along with the fork direction, ostensibly Bitcoin-XT, then the new network won’t be near as secure and likely won’t be as fast as the nodes and miners left on the other side of the fork.

In any team situation, there are going to be people you don’t like working with. That doesn’t mean you leave and start a new project, solely for that reason. Rather, you find a reasonable solution to the problem at hand, one that the element you don’t agree with will eventually accept. As John Light said in my recent CCN podcast, there isn’t really a discussion on whether or not the block size needs to be increased. The question is really how and when.

Some of the most die-hard folks in opposition of the increase say that the increase could be implemented in “a couple of weeks,” but such a position fails to acknowledge exactly how long a time that a couple of weeks actually is. In trading time, it’s an eternity. If you’ve got a couple of weeks which allow the mainstream and anti-Bitcoin press to say the network has reached its capacity, that there is now irrefutable proof that such a solution can’t work for mass usage, then you’ve also got a pristine situation for something even worse: mass exit strategies being executed by large holdings. A self-eating bear that the value of Bitcoin could likely never recover from.

Also read: Bitcoin-Xt Pushing Ahead With Bigger Blocks

And let’s be clear: the fact that such elements raise this as a defense of their position, that such measures could be taken quickly, is also an admission that they should be taken at all. If you agree that block sizes should be increased at some point in the future, then why can you not agree that they should happen sooner than that? Is this some play to appear relevant, or moreover to illustrate dissatisfaction with other facets of the situation? Are you saying no to the developers proposing the increase, rather than saying no to the actual increases? Would this be the same if you were the lead developer, and even your most banal statements were echoed by hundreds of people within hours of making them?

businessbusinessScaling is important, but it’s not all that matters. The opposition to block size increases have several valid reasons for their opposition, one being that it will increase the cost to miners of mining. This is a legitimate concern, and there needs to be some evidence that miners will be compensated on the other side of it. We need mining to maintain the security and integrity of Bitcoin. It would not be ideal if only large operations could afford to do mining. It would not be ideal if those coming to Bitcoin for the first time had to wait hours or days for their first transactions to go through.

At the same time, it would not be ideal if “free transaction” continues to be a refrain used by those promoting Bitcoin. It is not free to move bitcoins as well as it is not free to create them. It is not free to store the block chain, either, though it certainly gets less expensive as time goes on. These considerations need to be given the respect they deserve. The entire community needs to agree that free transactions are nonsense. If you can’t pay a penny to send some money, why then, really, are you sending money? Perhaps the increased costs of a block size increase should hinge on a mandatory increase in transaction fees. If we can now do 100 transactions per second and the mandatory cost of a transaction is a penny or half of a penny, wouldn’t miners be less likely to feel it so negatively? Wouldn’t they be able to compensate and, over time, profit by this?

The best solution will answer the concerns of everyone at once. This sounds impossible, but it seems that other divided groups manage it everyday. Obstructionists tacticians need to be ostracized. Those who are proven wrong in their position and then simply double up with some theoretical or otherwise unlikely reasoning to return to that position, rather than doing the rational thing, which is to concede it, should be replaced with equally competent people. As Nick Szabo recently said of the whole thing, we need less noise and more science. The science seems to disprove the doomsday predictions of the anti-increase crowd, and also seems to underline that it’s not as dire as the other crowd makes it seem either.

Whatever happens, there are many thousands of people who are deeply invested in this thing we call Bitcoin, and for a few people to effect a massive devaluation of their investment simply because they can’t agree, that cannot be allowed.

Updated: June 14, 2015 at 3:44 pm CET.

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