Many major mining pools and firms including KnCMiner, Bitfury, f2pool, BTCChina and 21 Inc. have begun to publicly support Jeff Garzik’s BIP 100, by dedicating a huge part of their hashing power to mine BIP 100 blocks.
As Bitcoin Core Developer Jeff Garzik explains, the objective of Bitcoin Improvement Proposal or BIP 100 is to “remove [the] static 1MB block size limit” and to simultaneously add a new floating block size limit set to 1MB.
Currently, more than half of the world’s mining pools are supporting BIP 100, as more than 52% of the blocks mined in the last three days contained string “BV” + some digits in their coinbase scriptSig that is BIP 100.
According to some “researchers,” BIP 100, a soft fork block size increase proposal submitted by bitcoin core developer Jeff Garzik has a critical flaw in its system; a possibility of a 21% attack.
Amongst the nine new proposed changes to the protocol, Garzik suggested a new miners’ voting system:
“Miners vote by encoding ‘BV’+BlockSizeRequestValue into coinbase scriptSig, e.g. ‘/BV8000000/‘ to vote for 8M. Votes are evaluated by dropping bottom 20% and top 20%, and then the most common floor (minimum) is chosen.”
This new “change” simply means that the top and bottom 20% of votes are abandoned and the minimum is favored. Which also means that a mining pool or an individual miner with over 21% of the hashing power could gain the ability to drop a block’s size to the minimum. Such ability could damage the Bitcoin network unless recovered by a hard fork.
Unlike the BIP 101, which is currently supported by the majority of the major bitcoin exchanges and processors like Blockchain.info, Bitpay, Xapo, BitFinex, etc., BIP 100 has been skeptical by the Bitcoin community because of the reasons mentioned above. Additionally, BIP 100 gives too much power and authority to the miners.
One Redditor explicitly explained the risk of BIP 100 in a technical level:
“Assuming a block size limit of 1 MB, and a voting cycle of 3 months (the BIP doesn’t seem to specify it, but it can be implied from the initial voting cycle), 1 year of mining would ‘only’ allow you to drop the block size four times, e.g. from 1 MB to 500 KB, 250 KB, 125 KB, and finally 62.5 KB. That wouldn’t irreversibly destroy Bitcoin on a technical level, but probably make it unaffordable to transact on it and destroy it on an economic level.”
BIP 101 support
Because of the weaknesses of BIP 100, Bitpay, Blockchain.info, Circle, itBit, Bitgo, Bitnet and Xapo have submitted a BIP 101 proposal letter.
“We support the implementation of BIP101,” the companies’ executives wrote. “We have found Gavin’s arguments on both the need for larger blocks and the feasibility of their implementation — while safeguarding Bitcoin’s decentralization to be convincing. BIP101 and 8MB blocks are already supported by a majority of the miners and we feel it is time for the industry to unite behind this proposal.”
What do you think of the BIP 100 criticism? Is a 21% attack possible? Comment below.
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