Vitalik Buterin, co-founder of Ethereum, has a detailed reflection about the Bitcoin Block Size Wars, a significant conflict within the Bitcoin community that spanned from 2015 to 2017. This debate focused on whether Bitcoin’s block size limit should be increased from 1MB to allow for more transactions, thus reducing costs and increasing its usefulness as a payment system.
Buterin, who experienced the block size war firsthand, initially joined the “big blockers.” This group advocated for larger blocks to keep transaction costs low and preserve Bitcoin’s role as digital cash. They argued that Bitcoin’s original vision, as outlined in the whitepaper, was to serve as a peer-to-peer electronic cash system. Major blockers believed that increasing block size was essential to prevent high fees from undermining this use case. They also referenced the writings of Satoshi Nakamoto, which suggested that larger blocks could be managed using simplified payment verification and hard forks to gradually increase block size.
Conversely, the ‘small blockers’ prioritized maintaining Bitcoin’s decentralization and security. They argued that larger blocks would make it more difficult and expensive for individuals to manage nodes, potentially centralizing control over a few large entities. Small blockers were concerned that frequent and significant changes to the protocol, mainly via hard forks, could undermine Bitcoin’s stability and governance model. They believed that Bitcoin should remain a decentralized store of value, similar to digital gold, rather than focusing on being a payment system.
Buterin’s reflections reveal a nuanced understanding of both sides. He recognized that while he believed big blockers were right to need larger blocks to keep costs down, they often lacked the technical competence to implement their solutions effectively. He criticized the major blockers for failing to agree on realistic limits for increasing block size and for their technical missteps, such as the poorly executed Bitcoin Classic and Bitcoin Unlimited projects. These projects were marred by security issues and overly complex implementations, ultimately discrediting the big block movement.
On the other hand, Buterin found the small blockers’ approach to governance and protocol changes too conservative. He disagreed with their rigid stance against hard forks and their reliance on soft forks, which he considered unnecessarily complex. He also criticized the small blockers for their alleged social media censorship and exclusion of dissent, which suppressed open debate within the community.
In assessing the long-term implications, Buterin highlighted a recurring problem in political and organizational conflicts: the “one-sided competence trap,” where one side monopolizes competence but fails to consider broader perspectives. This dynamic in the bloc war hinders constructive dialogue and progress. “Smart people want to collaborate with other smart people,” Buterin noted, emphasizing the importance of a balanced and inclusive approach to avoid such pitfalls.
Buterin also criticized the lack of technological foresight in the debates, pointing to the lack of discussions on zero-knowledge proofs (ZK-SNARKs), which could have provided scalable solutions. “The ultimate diffuser of political tension is not compromise, but rather new technology,” he asserted, advocating continued innovation to address scalability and governance issues.
Looking back on Ethereum’s development, Buterin noted how lessons from Bitcoin’s block size wars shaped Ethereum’s emphasis on customer diversity and scalable layer 2 solutions. He emphasized the importance of learning from past conflicts to build more resilient and pluralistic digital communities. “Ethereum’s explicit attempt to foster a pluralistic ecosystem is largely an attempt to avoid one-sided competency pitfalls,” he concluded, emphasizing the value of inclusive governance and technological advancement.
Buterin’s perspective highlights the broader implications of the block size war for the crypto community. He sees it as a cautionary tale about the dangers of one-sided competency traps, where one faction monopolizes technical expertise but pursues a narrow agenda, while the opposition fails to develop the necessary skills to implement its vision. This dynamic, he argues, can lead to stagnation and internal conflict.
Ultimately, Buterin believes that the solution to such conflicts lies in embracing new technologies that can address the concerns of both parties. He points to advances in ZK-SNARKs and other scalability solutions as possible ways to reconcile the need for low costs with the need to maintain decentralization. By focusing on technological innovation, Buterin hopes the crypto community can move beyond divisive debates and work toward more inclusive and practical solutions.
Buterin’s reflections on the Bitcoin block size wars highlight the importance of balancing decentralization, technical competence, and innovative solutions in the evolution of crypto ecosystems. His insights provide an interesting lens through which to understand the complexities of Bitcoin’s past and the ongoing challenges digital currencies face.