The Blocksize Wars

The Blocksize War: The battle over who controls Bitcoin’s protocol rules
By Jonathan Bier
Published in March 2021
228 Pages
Thibault’s Score: 3/5

This book chronicles the history of the “blocksize wars,” an internecine conflict within the Bitcoin community over how Bitcoin should be updated.

Bitcoin was designed with a 1 mb block size limit. This was suitable for a small number of transactions, where everything could be settled in minutes. As the number of transactions increased, a larger block size became necessary to settle the transactions.

I remember that, around this time, I struggled to use Bitcoin because of the small block sizes. I remember needing to wait hours, or sometimes even days, to settle transactions and paying huge fees that effectively doubled the price of whatever I bought.

The argument is a very strange one: on one side, the large blockers wanted to do the obvious and increase the block size. On the other side, the small blockers didn’t want to increase it or wanted to increase it slowly. Strangely, many small blockers admitted that the block size would eventually need to be increased.

The arguments of the large blockers are very straightforward. Increase the block size to make Bitcoin more efficient. The arguments of the small blockers are complicated and diverse - their camp was much less unified. Some argued that Bitcoin should never be changed because it would undermine the stability of the system (future changes could lead to crazy things like hyperinflation). Others argued that Bitcoin wasn’t supposed to be a currency, and should just be a science project. Yet others agreed in principle with block size increase, but simply disagreed with every single specific proposal.

Although economic self interest would predict that the big blockers should win, in the end, the small blockers won. As a result, Bitcoin is crippled and can only be practically used for large transactions today.

The small blockers won by resorting to underhanded tactics. Most notably, they took control of all online Bitcoin discussion forums, and censored everyone who disagreed with them. They also worked with mainstream media journalists to write hit pieces personally attacking all large blockers on unrelated issues. The small backers enjoyed institutional, and government support. I can’t help but suspect that they enjoyed this support from people who did not want to see Bitcoin succeed.

Some tech - like Segwit - functionally allowed less data to be transmitted allowing more data to be transmitted within the 1 mb, functionally increasing the maximum block size to 4 mb. However, this tech was too little too late to save Bitcoin.

The book is mostly a collection of conference notes, discussions the author had, Reddit, and discord posts. 

The author does not seriously discuss the potential role of intelligence agencies in influencing the community in either way, or the interest that the government might have in crippling Bitcoin. This is to be expected from authors who haven’t studied intelligence agencies and psyops. However, in this case, his book is crippled by his lack of speculation.

If you don’t know at least the basics of Bitcoin already, this book isn’t for you. But if you already know the basics, and want to learn about the niche topic of the blocksize wars, then this is a good book for you. The one thing that I would caution is that I think that although the author attempts to be unbiased, he is clearly a small blocker who discounts “conspiracy theories” out of hand. I wish that the author would take the time to interview ex-intelligence officers and insiders about black ops to familiarize himself with how the government operates in the shadows. 

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