Share Dialog
Share Dialog
Subscribe to Blockchain & Crypto Asia
Subscribe to Blockchain & Crypto Asia
<100 subscribers
<100 subscribers
Welcome back to Blockchain & Crypto Asia. This is Coco. In this issue, I want to share an interview I recently conducted with the author Jonathan Bier, whose book The Blocksize War details the extensive debate and battle between two groups of people over Bitcoin’s blocksize. Through the book, we have the opportunity to “meet” many OG (old gangsters), some from the West, some from Asia, and relive the time when Bitcoin was going through a critical moment. Please read on.
The book “The Blocksize War” by Jonathan Bier chronologizes the debate and battles between the two camps, large blockers and small blockers, over Bitcoin’s blocksize limit between 2015 and 2017. “On the surface, the battle was about the amount of data allowed in each Bitcoin block, however, it exposed much deeper issues, such as who controls Bitcoin’s protocol rules.” It is not an exaggeration to say that Bitcoin approached the brink of catastrophic failure.
While reading Jonathan’s book I learned for the first time the details of the war over blocksize. I reached out to him to propose an interview because I had some burning questions to ask. While he agreed and we spoke via Zoom, I can only share our conversation in text.
Respecting his request and with his permission, I am recalling our conversation as follows:
[Coco] Briefly talk about yourself, what drew you into the ecosystem and what led you to write this book?
[Jonathan] I studied cryptography, finance and accounting at college. It was my hobby to follow the disputes on the blocksize limit. At that time I was working in London with the investment management firm Ruffer. At the end of 2015, I resigned from Ruffer and moved to Hong Kong where I lived until I moved back to the U.K. in 2018. In 2021, I started writing this book, thinking that as the war was finally behind us, I should document it before I forgot about it and before the world forgot about it.
[Coco] What got into the minds of the large blockers that it was critical to increase Bitcoin's blocksize limit? What was the motivation behind their thinking, ideology, financial gain, or control and power? Was there any merit in their argument?
[Jonathan] Bitcoin was definitely going through a crisis when the large blockers raised the issue in 2015. For example, some big-name merchants left Bitcoin due to serious chain congestion and sporadic fee spikes. Initially, large blockers were driven by financial reasons. They wanted Bitcoin to have a faster adoption by merchants and build out the scalability that would enable the support for more transactions at a faster speed. There was definitely some merit in their concerns about the blocksize limit of Bitcoin, which was 1MB. As the war dragged on seemingly forever, large blockers let their ego, increasing frustration and anger take over, and the debate slid into a fight for control of Bitcoin.
[Coco] Large blockers tried multiple projects, from Bitcoin XT, Bitcoin Classic, Bitcoin Unlimited to SegWit2X; however, none of them worked. Were they ever close to succeeding? What were the main reasons that large blockers kept failing? Could you highlight some of the things that small blockers did right to defeat the large blockers?
[Jonathan] The large blockers were closest to winning the war when they introduced Bitcoin Classic. The rest of the projects had obvious flaws. However, the Hong Kong Roundtable held in Feb. 2016 stalled the hard-fork to Bitcoin Classic through an agreement signed by both sides. According to the agreement, Bitcoin would undergo an upgrade called SegWit (a protocol upgrade formulated by Bitcoin developer Pieter Wuille to protect against transaction malleability and decrease transaction times by increasing block capacity) and the hard-fork to Bitcoin Classic would happen if there was strong community support.
Besides that, large blockers made additional monumental blunders such as aligning themselves with the controversial figure, Craig Wright, which seriously damaged their reputation. In addition, they turned to some “leaders” to lead the battle, in the beginning, Mike Hearn and Gavin Andresen, next Jihan Wu and Roger Ver, followed by Jeff Garzik and Mike Belshe. The constant switching of “leaders” did not help their effort because the result was a lack of consistent strategy.
Bitcoin Cash advocated by Jihan Wu and Roger Ver was also a significant blunder. If large blockers had stayed focused on launching SegWit2x, they might have had a better chance.
Small blockers were good at grassroot campaigns. For example, they launched campaigns to ridicule Roger Ver and Jihan Wu to hurt their reputation, so as to destroy the credentials of large blockers’ projects.
Compared with large blockers, small blockers were more patient, waiting for large blockers to make mistakes. Once they identified technical flaws in large blockers’ projects they used them to their own advantage. A good example is that they successfully convinced some major exchanges not to accept the New York Agreement crafted and led by DCG and backed by some large companies in the ecosystem.
Small blockers were more technologically sophisticated than large blockers, while large blockers were more business and growth driven. The best scenario was for both sides to work together. However, due to a lack of trust, neither side wanted to listen to each other, suspecting any ideas were attempts to defeat the opponent.
[Coco] Why did most of the large companies, including Silicon Valley VC-backed ones, side with large blockers? Why did you think most Asian miners took the side of the large blockers, in particular, Jihan Wu?
[Jonathan] Silicon Valley’s mentality is growth, market share, lower fees, and scalability, which contradicted with small blockers’ vision and philosophy – conservative and cautious.
Jihan Wu was against large blockers in the beginning, strongly against Mike Hearn’s Bitcoin XT. The communication between Chinese miners and large blockers did not go well. That partly explained why Chinese miners claimed loyalty to Bitcoin Core, which was fatal to Bitcoin XT’s adoption.
However, for some unknown reasons, Jihan Wu changed his stance during the battle and became a staunch large blocker. He and miners in China controlled close to 65% of Bitcoin’s hashrate during the blocksize war and, as a result, were an important group that both large and small blockers tried hard to win over.
I also found that those who joined the battle from the very beginning tended to side with large blockers, while those who came later in the debate were more diversified in their positions because they learned from what happened and had more information to help make their decision.
[Coco] Which camp more represented Satoshi’s vision? If we look at Satoshi's white paper, large blockers' vision was closer to Satoshi's, Bitcoin is a p2p electronic cash system without relying on trust, compared with small blockers' vision, “a new form of money that takes on central banks”. Which side would Satoshi have taken if he was consulted?
[Jonathan] The small blockers’ narrative was a new development. They believed Bitcoin was a new form of money that would take on central banks and fiat currencies. They did not believe that Bitcoin protocol should compete with traditional financial systems in terms of speed. They wanted to keep the smaller electronic payments/transactions on Layer 2.
I am not sure that I would agree with the view that large blockers were more aligned with Satoshi’s vision.
Satoshi’s proposal for blocksize limit increase, if necessary, had safety mechanisms and would take some time to implement.
Actually, Satoshi did appear to contribute to the debate from one of his email addresses on the day Bitcoin XT was published. However, it is hard to verify whether it was truly from Satoshi. In this email, Satoshi wrote:
… When I designed Bitcoin, I designed it in such a way as to make future modifications to the consensus rules difficult without near unanimous agreement. Bitcoin was designed to be protected from the influence of charismatic leaders, even if their name is Gavin Andresen, Barack Obama, or Satoshi Nakamoto…
[Coco] When writing your book, did you find yourself more sympathetic to one side or the other?
[Jonathan] I was more of a neutral observer of the war. However, those I communicated with were mostly from the small blockers camp.
[Coco] Where would Bitcoin be today, five years later, if large blockers had won the war?
[Jonathan] Bitcoin might have become just another chain like Ethereum, Solana and others. The blocksize war proved to the community that it was vital for Bitcoin to maintain a high degree of difficulty of modification to its protocol rules. Without near unanimous agreement no person or group of people can change the rules, either developers, miners or any person with significant influence. A vast majority of the community has to buy into any proposal to change the rules, a process that is often long, slow and inflexible, even frustrating to parties involved, but only in this way can Bitcoin maintain the robustness of the network.
[Coco] Are you thinking about writing another book about the ecosystem?
[Jonathan] Actually, I have published another one named “Reckless”.
——
The two-year-long war over Bitcoin’s blocksize limit was definitely a stress test for Bitcoin. In addition, it was a learning process for all the actors involved in the ecosystem to understand what Bitcoin was, what it wasn’t and how it worked. I want to end the interview with the following quotation from the book:
“In some people’s minds, the idea of a system controlled by end users is too difficult to grasp. Instead, they look for somebody or some entity who controls the system. Some people cannot fathom the idea of a system which has global consensus, but lacks a leader. In their minds, in 2015, Gavin was the leader, then it was Jihan and now it was Bitcoin Core. Whether Bitcoin really is the leaderless system it proclaims to be and whether this will always remain the case, the jury is still out. One thing is clear: there is still hope that the claim is true.”
Thank you for reading, until next time. I would be delighted to learn about your thoughts. Please leave your message below.
In the innovative blockchain, crypto & digital asset ecosystem, Asia is the other side of the coin. Blockchain & Crypto Asia, which covers exclusively blockchain and crypto & digital asset developments in Asia, including regulation, investments, and company highlights, helps you stay on top of what is going on in the Far East. The curated content is selective and serves as information and personal views only, not investment advice.
I am the co-founder of Kee Global Advisors. Please email me with any ideas or thoughts. I’d love to hear from you! You can also follow me on Linkedin and Twitter.
Welcome back to Blockchain & Crypto Asia. This is Coco. In this issue, I want to share an interview I recently conducted with the author Jonathan Bier, whose book The Blocksize War details the extensive debate and battle between two groups of people over Bitcoin’s blocksize. Through the book, we have the opportunity to “meet” many OG (old gangsters), some from the West, some from Asia, and relive the time when Bitcoin was going through a critical moment. Please read on.
The book “The Blocksize War” by Jonathan Bier chronologizes the debate and battles between the two camps, large blockers and small blockers, over Bitcoin’s blocksize limit between 2015 and 2017. “On the surface, the battle was about the amount of data allowed in each Bitcoin block, however, it exposed much deeper issues, such as who controls Bitcoin’s protocol rules.” It is not an exaggeration to say that Bitcoin approached the brink of catastrophic failure.
While reading Jonathan’s book I learned for the first time the details of the war over blocksize. I reached out to him to propose an interview because I had some burning questions to ask. While he agreed and we spoke via Zoom, I can only share our conversation in text.
Respecting his request and with his permission, I am recalling our conversation as follows:
[Coco] Briefly talk about yourself, what drew you into the ecosystem and what led you to write this book?
[Jonathan] I studied cryptography, finance and accounting at college. It was my hobby to follow the disputes on the blocksize limit. At that time I was working in London with the investment management firm Ruffer. At the end of 2015, I resigned from Ruffer and moved to Hong Kong where I lived until I moved back to the U.K. in 2018. In 2021, I started writing this book, thinking that as the war was finally behind us, I should document it before I forgot about it and before the world forgot about it.
[Coco] What got into the minds of the large blockers that it was critical to increase Bitcoin's blocksize limit? What was the motivation behind their thinking, ideology, financial gain, or control and power? Was there any merit in their argument?
[Jonathan] Bitcoin was definitely going through a crisis when the large blockers raised the issue in 2015. For example, some big-name merchants left Bitcoin due to serious chain congestion and sporadic fee spikes. Initially, large blockers were driven by financial reasons. They wanted Bitcoin to have a faster adoption by merchants and build out the scalability that would enable the support for more transactions at a faster speed. There was definitely some merit in their concerns about the blocksize limit of Bitcoin, which was 1MB. As the war dragged on seemingly forever, large blockers let their ego, increasing frustration and anger take over, and the debate slid into a fight for control of Bitcoin.
[Coco] Large blockers tried multiple projects, from Bitcoin XT, Bitcoin Classic, Bitcoin Unlimited to SegWit2X; however, none of them worked. Were they ever close to succeeding? What were the main reasons that large blockers kept failing? Could you highlight some of the things that small blockers did right to defeat the large blockers?
[Jonathan] The large blockers were closest to winning the war when they introduced Bitcoin Classic. The rest of the projects had obvious flaws. However, the Hong Kong Roundtable held in Feb. 2016 stalled the hard-fork to Bitcoin Classic through an agreement signed by both sides. According to the agreement, Bitcoin would undergo an upgrade called SegWit (a protocol upgrade formulated by Bitcoin developer Pieter Wuille to protect against transaction malleability and decrease transaction times by increasing block capacity) and the hard-fork to Bitcoin Classic would happen if there was strong community support.
Besides that, large blockers made additional monumental blunders such as aligning themselves with the controversial figure, Craig Wright, which seriously damaged their reputation. In addition, they turned to some “leaders” to lead the battle, in the beginning, Mike Hearn and Gavin Andresen, next Jihan Wu and Roger Ver, followed by Jeff Garzik and Mike Belshe. The constant switching of “leaders” did not help their effort because the result was a lack of consistent strategy.
Bitcoin Cash advocated by Jihan Wu and Roger Ver was also a significant blunder. If large blockers had stayed focused on launching SegWit2x, they might have had a better chance.
Small blockers were good at grassroot campaigns. For example, they launched campaigns to ridicule Roger Ver and Jihan Wu to hurt their reputation, so as to destroy the credentials of large blockers’ projects.
Compared with large blockers, small blockers were more patient, waiting for large blockers to make mistakes. Once they identified technical flaws in large blockers’ projects they used them to their own advantage. A good example is that they successfully convinced some major exchanges not to accept the New York Agreement crafted and led by DCG and backed by some large companies in the ecosystem.
Small blockers were more technologically sophisticated than large blockers, while large blockers were more business and growth driven. The best scenario was for both sides to work together. However, due to a lack of trust, neither side wanted to listen to each other, suspecting any ideas were attempts to defeat the opponent.
[Coco] Why did most of the large companies, including Silicon Valley VC-backed ones, side with large blockers? Why did you think most Asian miners took the side of the large blockers, in particular, Jihan Wu?
[Jonathan] Silicon Valley’s mentality is growth, market share, lower fees, and scalability, which contradicted with small blockers’ vision and philosophy – conservative and cautious.
Jihan Wu was against large blockers in the beginning, strongly against Mike Hearn’s Bitcoin XT. The communication between Chinese miners and large blockers did not go well. That partly explained why Chinese miners claimed loyalty to Bitcoin Core, which was fatal to Bitcoin XT’s adoption.
However, for some unknown reasons, Jihan Wu changed his stance during the battle and became a staunch large blocker. He and miners in China controlled close to 65% of Bitcoin’s hashrate during the blocksize war and, as a result, were an important group that both large and small blockers tried hard to win over.
I also found that those who joined the battle from the very beginning tended to side with large blockers, while those who came later in the debate were more diversified in their positions because they learned from what happened and had more information to help make their decision.
[Coco] Which camp more represented Satoshi’s vision? If we look at Satoshi's white paper, large blockers' vision was closer to Satoshi's, Bitcoin is a p2p electronic cash system without relying on trust, compared with small blockers' vision, “a new form of money that takes on central banks”. Which side would Satoshi have taken if he was consulted?
[Jonathan] The small blockers’ narrative was a new development. They believed Bitcoin was a new form of money that would take on central banks and fiat currencies. They did not believe that Bitcoin protocol should compete with traditional financial systems in terms of speed. They wanted to keep the smaller electronic payments/transactions on Layer 2.
I am not sure that I would agree with the view that large blockers were more aligned with Satoshi’s vision.
Satoshi’s proposal for blocksize limit increase, if necessary, had safety mechanisms and would take some time to implement.
Actually, Satoshi did appear to contribute to the debate from one of his email addresses on the day Bitcoin XT was published. However, it is hard to verify whether it was truly from Satoshi. In this email, Satoshi wrote:
… When I designed Bitcoin, I designed it in such a way as to make future modifications to the consensus rules difficult without near unanimous agreement. Bitcoin was designed to be protected from the influence of charismatic leaders, even if their name is Gavin Andresen, Barack Obama, or Satoshi Nakamoto…
[Coco] When writing your book, did you find yourself more sympathetic to one side or the other?
[Jonathan] I was more of a neutral observer of the war. However, those I communicated with were mostly from the small blockers camp.
[Coco] Where would Bitcoin be today, five years later, if large blockers had won the war?
[Jonathan] Bitcoin might have become just another chain like Ethereum, Solana and others. The blocksize war proved to the community that it was vital for Bitcoin to maintain a high degree of difficulty of modification to its protocol rules. Without near unanimous agreement no person or group of people can change the rules, either developers, miners or any person with significant influence. A vast majority of the community has to buy into any proposal to change the rules, a process that is often long, slow and inflexible, even frustrating to parties involved, but only in this way can Bitcoin maintain the robustness of the network.
[Coco] Are you thinking about writing another book about the ecosystem?
[Jonathan] Actually, I have published another one named “Reckless”.
——
The two-year-long war over Bitcoin’s blocksize limit was definitely a stress test for Bitcoin. In addition, it was a learning process for all the actors involved in the ecosystem to understand what Bitcoin was, what it wasn’t and how it worked. I want to end the interview with the following quotation from the book:
“In some people’s minds, the idea of a system controlled by end users is too difficult to grasp. Instead, they look for somebody or some entity who controls the system. Some people cannot fathom the idea of a system which has global consensus, but lacks a leader. In their minds, in 2015, Gavin was the leader, then it was Jihan and now it was Bitcoin Core. Whether Bitcoin really is the leaderless system it proclaims to be and whether this will always remain the case, the jury is still out. One thing is clear: there is still hope that the claim is true.”
Thank you for reading, until next time. I would be delighted to learn about your thoughts. Please leave your message below.
In the innovative blockchain, crypto & digital asset ecosystem, Asia is the other side of the coin. Blockchain & Crypto Asia, which covers exclusively blockchain and crypto & digital asset developments in Asia, including regulation, investments, and company highlights, helps you stay on top of what is going on in the Far East. The curated content is selective and serves as information and personal views only, not investment advice.
I am the co-founder of Kee Global Advisors. Please email me with any ideas or thoughts. I’d love to hear from you! You can also follow me on Linkedin and Twitter.
No activity yet