Written by: Vitalik Buterin
Compiled by Karen, Foresight News
I recently finished reading (or listening to) two major histories of the Bitcoin blocksize debate of the 2010s, which represent two extremes of the topic:
- Jonathan Bier’s The Blocksize War, which tells the story from a pro-small-block perspective;
- Roger Ver and Steve Patterson's "Hijacking Bitcoin" tells this story from the perspective of supporting large blocks.
It is fascinating to revisit the history of these two events, which I personally experienced and even participated in to some extent.
Although I knew most of what happened and each side's perspective on the nature of the conflict, there were some interesting details that I was either unaware of or had completely forgotten. This article will shed new light on the situation.
Previously, I was a big blocker, but a pragmatic medium-blocker, opposed to extreme increases in block size or absolutely advocating that transaction fees should never significantly exceed zero. So, do I still support my views now? I am looking forward to watching and finding out.
Jonathan Bier: What do small blockers think of the block size war?
The original debate in the block size war revolved around a simple question: Should Bitcoin undergo a hard fork, raising the block size limit from its then-current 1MB to a higher value, thereby enabling Bitcoin to process more transactions and reduce the cost of individual transactions, but at the cost of making it more difficult and expensive to run and verify a node?
Bier’s book left me with the impression that while small blockers do care about this specific level of problem, and they tend to take a conservative approach by only increasing the block size slightly to ensure that it’s still easy to run a node, they care more about the more general meta-level issue of how these kinds of protocol-level problems are decided.
In their view, changes to the protocol (especially "hard forks") should be extremely rare and require a high degree of consensus among the protocol's users.
Bitcoin isn’t trying to compete with payment processors — there are already plenty of them. Instead, it’s trying to be something unique: an entirely new type of money, one that’s not controlled by central authorities or central banks.
If Bitcoin were to start having a highly active governance structure (which would require controversial adjustments to block size parameters) or become susceptible to coordinated manipulation by miners, exchanges, or other large companies, it would forever lose this valuable unique advantage.
In Bier’s account, big blockers often try to bring together a relatively small number of large players to legitimize and promote changes they prefer — something that runs counter to how small blockers view governance.
The New York Agreement, signed in 2017 by major bitcoin exchanges, payment processors, miners and other companies, is seen by small blockers as a prime example of an attempt to shift bitcoin from user rule to a corporate cabal.
Roger Ver: How do the big blockers view the block size war?
Big blockers typically focus on a key underlying object-level question: What 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 of Bitcoin, and the vision that all big blockers agree on, was to be digital cash. The Bitcoin whitepaper even says so!
The big blockers often cite two other things written by Satoshi Nakamoto:
1. The Simplified Payment Verification section of the white paper discusses how, once blocks become very large, individual users can use Merkle proofs to verify that their payments are included without having to verify the entire chain.
2. Bitcointalk quoted a statement advocating a gradual increase in block size through hard forks:
For them, the shift from a focus on digital cash to digital gold is a critical transition, one that is agreed upon by a small, tight-knit group of core developers who believe that they have thought about the issue and reached internal conclusions, and therefore have the right to impose their views on the entire project.
Small blockers do propose some solutions that allow Bitcoin to be both cash and gold at the same time - that is, Bitcoin becomes Layer 1, which focuses on being gold, while Layer 2 protocols built on top of Bitcoin, such as the Lightning Network, provide cheap payment methods that do not require using the blockchain for every transaction. However, these solutions are extremely insufficient in practice, and Roger Ver criticizes them in depth in several chapters. For example, even if everyone switches to the Lightning Network, the block size will eventually need to be increased in order to accommodate hundreds of millions of users. In addition, receiving tokens trustlessly in the Lightning Network requires having an online node, and ensuring that the tokens are not stolen requires checking the blockchain once a week. Roger Ver believes that these complexities will inevitably push users to interact with the Lightning Network in a centralized manner.
What are the main differences in their views?
Roger Ver’s description of the debate on an objective level matches that of the small blockers: both sides agree that the small blockers value the convenience of running a node more, while the big blockers value low transaction fees more.
Both sides acknowledge that there are legitimate differences in belief, and that such differences are a key factor driving the debate.
However, Bier and Ver describe the deeper problem very differently. For Bier, small blockers represent users against a small but powerful group of miners and exchanges that seek to control the blockchain for their own benefit. Small blockers keep Bitcoin decentralized by ensuring that ordinary users can run nodes and validate the blockchain.
For Ver, big blockers represent users against a small but powerful group of self-appointed authority figures (high priests) and venture capital-funded companies (i.e. Blockstream) that profit from building layer 2 solutions necessary for the small block roadmap. Big blocks keep Bitcoin decentralized by ensuring that users can continue to afford on-chain transactions without relying on centralized second-layer infrastructure.
In my opinion, the closest the two sides come to "agreeing on the disputed issues" is that Bier's book acknowledges that many big blockers are well-intentioned and even acknowledges that they have legitimate complaints about the censorship of opposing views by forum administrators who support small blocks, but often criticizes the big blockers for their incompetence; while Ver's book is more willing to attribute malicious intent and even conspiracy theories to small blockers, but rarely criticizes their competence. This echoes a common political rhetoric I have heard many times, that "the right thinks the left is naive, and the left thinks the right is evil."
How did I feel about the block size war? How do I feel about it now?
Room 77 in Berlin, which used to accept Bitcoin, was the center of Berlin's Bitcoin Kiez, an area where a large number of restaurants accepted Bitcoin. Unfortunately, the dream of Bitcoin as a payment method faded in the second half of this decade, and I think rising transaction fees were a key reason for this.
When I personally experienced the Bitcoin block size war, I supported the big block faction. My support for the big block side focused on a few key points:
1. One of the key promises of Bitcoin was as digital cash, and high fees could kill that use. While Layer 2 protocols could theoretically offer lower fees, the whole concept has not been fully tested, and it is irresponsible for small blockers to insist on a small block roadmap with little understanding of how the Lightning Network performs in practice. Today, practical experience with the Lightning Network has made its prospects even more pessimistic.
2. I don’t believe in the “meta-level” arguments of the small blockers. The small blockers often argue that “Bitcoin should be controlled by users” and that “users don’t support large blocks”, but they are never willing to clearly define who “users” are or how to measure their wishes. The big blockers implicitly propose at least three different ways to calculate the number of users: hash power, public statements from well-known companies, and social media discussions, and the small blockers condemn each method.
3. Compared with the simple hard fork to increase the block size, the "Segregated Witness" proposal adopted by the small block faction aims to increase the block size, but the process is too complicated and unnecessary. The small block faction eventually adopted a religious view of "soft fork is good, hard fork is bad" (I strongly disagree with this) and designed a method to increase the block size in accordance with this rule, although Bier admitted that this would lead to a great increase in complexity, so that many large block factions could not understand the proposal.
I feel like the small blockers weren’t just “pro-caution,” they were arbitrarily choosing between different types of caution, choosing one (no hard forks) at the expense of another (keeping clean, simple code and specs) because it suited their agenda. Eventually, the big blockers also ended up abandoning the “clean and simple” idea in favor of ideas like Bitcoin Unlimited’s adaptive blocksize increase, a decision that Bier (rightfully) lambasted them for.
4. Small Block did engage in very unethical censorship behavior on social media to promote their views, culminating in Theymos’ infamous statement: “If 90% of /r/Bitcoin users find these policies intolerable, then I hope that 90% of /r/Bitcoin users leave.”
Even relatively mild posts in support of larger blocks are frequently deleted.
Ver’s book focuses primarily on the first and fourth points, with some touches on the third, as well as theories about economically motivated misbehavior — namely, that small blockers founded a company called Blockstream to build Layer 2 protocols on top of Bitcoin while promoting the idea that Bitcoin’s first layer should remain restricted, making these commercial Layer 2 networks necessary.
Ver doesn’t dwell too much on the philosophy of how Bitcoin should be governed, because for him, the answer “Bitcoin is governed by miners” is satisfactory enough.
This is where I disagree on both sides: I find both the “we reject a vague consensus of actually defined users” and the “miners should control everything because they have aligned incentives” extremes unreasonable.
At the same time, I was very frustrated by some key points of the big blockers, which also echoed Bier's book. The worst point (according to me and Bier) was that the big blockers were never willing to agree on any realistic limit principles for how big blocks should develop. A common view was that "block size is determined by the market" - meaning that miners can produce blocks of any size on demand, and other miners can choose to accept or reject those blocks. I strongly disagreed with this and pointed out that calling such a mechanism a "market" is an extreme distortion of the concept of "market". Ultimately, when the big blockers split off their own independent chain (Bitcoin Cash), they abandoned this view and set a block size limit of 32MB.
At the time, I actually did have a principled reasoning approach for how to decide on the block size limit. To quote a post from 2018: Bitcoin favors maximum predictability of the cost of reading the blockchain at the expense of minimum possible predictability of the cost of writing to the blockchain, with outcomes in the former metric predictably being very healthy and outcomes in the latter being catastrophic. Ethereum, with its current governance model, favors moderate predictability of both.
I later repeated this idea in a 2022 tweet. Essentially, the idea is this: we should balance increasing the cost of writing to the chain (i.e. transaction fees) with the cost of reading from the chain (i.e. software requirements for blockchain nodes). Ideally, if demand for using the blockchain increases 100x, we should make the blocksize 10x larger and the fees 10x higher (the demand elasticity for transaction fees is close enough to 1 that this approach works in practice).
Ethereum actually ended up taking a mid-block approach: since its launch in 2015, the chain’s capacity has increased by about 5.3x (perhaps 7x if you account for call data repricing and blobs), while fees have increased from almost nothing to a significant but not too high level.
However, this compromise-oriented approach never gained widespread acceptance on either side; perhaps it felt too “central-planny” to one side and too “wavering” to the other. Here I feel that the big blockers bear more responsibility than the small blockers; the small blockers were open to modest increases in blocksize in the beginning (e.g., Adam Back’s 2/4/8 plan), while the big blockers were unwilling to compromise, quickly moving from advocating a single increase to specific larger numbers to an overall philosophy that any non-trivial blocksize limit is illegal.
The regional faction also began to argue that miners should control Bitcoin, a view that Bier effectively criticized, pointing out that if miners tried to change the rules of the protocol to achieve other goals (such as increasing their own profits), they would likely quickly abandon their views.
The main criticism of the big blockers in Bier’s book is their repeated displays of incompetence. Bitcoin Classic’s code is poor quality, Bitcoin Unlimited is overly complex, they didn’t include wipeout protection for a long time and didn’t seem to realize that this choice greatly hurt their chances of success, and they had serious security vulnerabilities. They loudly proclaim the principle of needing multiple Bitcoin software implementations—a principle I agree with and one that Ethereum has adopted—but their “alternative clients” are really just some modifications to Bitcoin Core to implement the block size increase. According to Bier’s account, their repeated missteps in both code and economics ultimately led to them gradually losing more and more supporters.
Major big blockers were deceived by Craig Wright’s fraudulent attempt to impersonate Satoshi Nakamoto, which further discredited them.
Craig Wright is a fraud pretending to be Satoshi Nakamoto. He often uses legal threats to silence criticism, which is why my fork is the largest online copy of the Cult of Craig repository, which documents the evidence that he is a fake. Unfortunately, many big blockers fell for Craig's ruse because Craig caters to the big blocker's position.
Overall, reading through both books, I found myself agreeing more with Ver on the big picture issues, but more with Bier on the individual details.
In my opinion, the big blockers are right on the core point that blocks need to be bigger, and that this would be best accomplished with the clean and simple hard fork that Satoshi described, but the small blockers make far fewer embarrassing technical errors and have positions that lead to less absurd results if you try to follow them to their logical conclusion.
In my opinion, the big blockers are right on the key point that blocks need to be bigger and that this is best accomplished by a clean and simple hard fork like Satoshi described. However, the small blockers make far fewer embarrassing technical errors.
The block size war is a one-sided capability trap
The combined picture I came away from reading both books was a political tragedy that I felt I saw over and over again in a variety of contexts, including cryptocurrencies, corporations, and national politics:
“One side has a monopoly on all the people with power, but uses its power to push narrow and biased views; the other side correctly recognizes that there is a problem, but is too focused on opposing it and fails to develop its own technical execution capabilities.”
In many similar cases, the first faction is criticized as authoritarian, but when you ask their (usually very large) supporters why they support them, their response is that the other side will only complain; if they actually gain power, they will completely fail within a few days.
To some extent, this isn’t entirely the fault of the opposition: it’s hard to become good at execution without a platform and experience. But in the specific blocksize debate, the big blockers seemed largely oblivious to the need for execution skills — they thought they could win simply by being right about blocksize.
The big blockers ultimately paid a heavy price for opposing overbuilding in multiple ways: Even when they forked off from Bitcoin Cash to create their own chain, they ended up splitting two more times before the community finally stabilized.
I call this problem the one-sided competence trap. It seems to be a fundamental problem for anyone trying to build a political entity, project, or community that hopes to be democratic or pluralistic. Smart people want to work with other smart people.
If two independent groups are equally powerful, people will tend to choose the one that better matches their values, and the balance will stabilize. But if the bias toward one side is too strong, it will shift to a different equilibrium, and it seems very difficult to shift it back.
To some extent, the partial capacity trap can be mitigated if the opposition recognizes that there is a problem and that they must consciously increase their capacity. Often, opposition movements fail to even take this step.
But sometimes simply recognizing the problem is not enough. We would benefit greatly if we had stronger, more in-depth methods to prevent and escape the partial capability trap.
Reduce conflict, improve technology
There is one extremely glaring omission in both books: the term “ZK-SNARK” does not appear at all. There is not much excuse for this: even in the mid-2010s, people were already very aware of ZK-SNARKs and their potential for scalability (and privacy). Zcash was released in October 2016. Gregory Maxwell briefly explored the scalability implications of ZK-SNARKs in 2013, but it does not seem to have been considered at all when discussing Bitcoin’s future roadmap.
The ultimate way to ease political tensions is not through compromise, but through the emergence of new technologies: discovering entirely new ways to satisfy the needs of both parties at essentially the same time. We’ve already seen several examples of this in Ethereum. A few that come to mind are:
1. Justin Drake pushed for BLS aggregation, enabling Ethereum’s proof-of-stake to handle more validators and thereby reduce the minimum stake balance from 1500 to 32 with little to no side effects. Recent work on signature merging is expected to further this progress.
2. EIP-7702 achieves the goals of ERC-3074 in a way that is more forward-compatible with smart contract wallets, thus helping to ease long-standing disputes.
3. Multidimensional Gas, starting with its implementation of blobs, has helped increase Ethereum’s ability to store Rollup data without increasing the block size in the worst case, thereby minimizing security risks.
When an ecosystem stops accepting new technologies, it inevitably stagnates and becomes more contentious: a political debate between "I get 10 more apples" and "you get 10 more apples" will cause significantly less conflict than a debate between "I give up 10 apples" and "you give up 10 apples."
The pain of loss is more intense than the pleasure of gain, and people are more willing to “break up” their shared political community in order to avoid losses. This is a key reason why I’m uncomfortable with ideas like “degrowth” and “we can’t use technology to solve social problems”: there are pretty strong reasons to believe that fighting over who wins more rather than who loses less is actually better for social harmony.
In economic theory, the two prisoner's dilemmas are indistinguishable: the game on the right can be seen as the game on the left plus a single (insignificant) step that results in a loss of four points no matter how either player moves. But in human psychology, the two games can be very different.
A key question for the future development of Bitcoin is whether Bitcoin can become a technology-oriented ecosystem. The development of Inscriptions and later BitVM has provided new possibilities for Layer2 and improved the functionality of the Lightning Network. Hopefully, Udi Wertheimer’s theory is correct that ETH getting an ETF means the demise of Saylorism and a renewed recognition that Bitcoin needs to improve technically.
Why do I care?
I care about studying Bitcoin’s successes and failures not because I want to disparage Bitcoin in order to exalt Ethereum; in fact, as someone who enjoys trying to understand social and political issues, I find that one of the things about Bitcoin is that it’s sociologically complex enough that its internal debates and divisions are so rich and fascinating that you could write two entire books about it.
Rather, I care about analyzing these issues because Ethereum, and other digital (and even physical) communities I care about, has a lot to learn from understanding what happened, what went well, and what could be done better.
Ethereum’s focus on client diversity stems from observing the failures of Bitcoin with only one client team. Ethereum explicitly attempts to foster a diverse ecosystem, primarily to avoid the one-sided capability trap.
Another example that comes to mind is the network state movement, which allows communities with similar values to be somewhat independent of mainstream society and to develop their own visions of future culture and technology.
But the experience of (post-fork) Bitcoin Cash shows that movements organized around forking to solve problems have a common failure mode: they can end up splitting again and again, never really managing to work together. The lessons of the Bitcoin Cash experience extend far beyond Bitcoin Cash itself.
Like insurgent cryptocurrencies, insurgent cyberstates need to learn to actually execute and build, not just throw parties on Twitter, post opinions, and share memes comparing modernist architecture to 16th century European architecture. Zuzalu is partly my own attempt to initiate change in this direction.
I recommend reading the books The Block Size War by Bier and Hijacking Bitcoin by Patterson and Ver to understand a defining moment in Bitcoin’s history.
I recommend reading both books with the mindset that this is not just about Bitcoin, but rather that it is about the first truly high-stakes “digital state” civil war, and that the lessons are important for other digital states we will build in the coming decades.
