How Might Blockstream Play its Cards Now That the Bitcoin Fork Countdown Has Begun?

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Bitcoin is nearing an historical day when the final decision on the blocksize matter has to be made as the network in unison and holistically decides how to address scalability.

After years of debate, the network appears to have achieved consensus in at least two very important aspects, exchanges and miners, which seem to be on the same page.

Two of bitcoin’s biggest exchanges, Gemini and Coinbase, have stated they will follow the longest chain. If Kraken and Bitstamp agrees with them, then we may have consensus in the labeling matter, something which would likely be precedent setting.

Miners are almost unanimously in support of segwit2x, with some 85% of them continuing to indicate intention to upgrade the network on or around November 16th.

The vast majority of users likely don’t care very much. Traders don’t appear to, with one of them commenting:

“Although it might be a problem for some, I do not believe that most traders will care. For instance, I actively trade on Gemini and I never installed any software. All I have installed is the Google Chrome extension for my Leger Nano S.”

He’s far from alone. If market movements have shown anything during years of debate is that they are not considering the question at all, presumably because they expect it to be temporary and resolved.

But while there may be wide consensus in many aspects, Blockstream, a for profit company that employs many bitcoin developers, appears to be out of consensus.

The most probable reason is that they want the network to be congested so that fees increase. With the Lightning Network and sidechains to then be launched months down the line, with fees as a sort of stick to move to it.

However, what they might want may be irrelevant when push comes to shove. Faced with a potential situation where all exchanges that matter call 2x as BTC, where almost all miners are on that chain, they may have little choice.

What they have said publicly if they face this sort of situation is that they will rage quit, a bit like Mike Hearn, but that’s unlikely since they are employees of for profit companies.

Instead, if it becomes clear the network is upgrading, they may need a face-saving way out. They, of course, can’t turn around and tell their supporters all this stuff about corporate take-over and bad miners and rubbish developers was just politiking tactics.

Nor can they tell them that what they really want is for fees to increase and the network to continue being congested for months or years as it transitions to this settlement network.

But they can tell them that 1MB is tiny, and after some tests of Schnor or whatever, which they found compresses it to whatever, effects on decentralization will be minimal, so we have full consensus, bitcoin is upgrading.

They’ll cheer, and the New York Times might cover it perhaps on their frontpage. The network would then upgrade, probably very smoothly, and the debate can end with a general objective consensus that blockchains need to scale both on-chain and through second layers.

Of course not too fast, but not so incredibly slowly either to the point of as good as not at all. Thereafter, 2MB should buy plenty of time to get all the technologies ready, the Schnors and whatever, the Lightning Network, sidechains and the rest.

It can be a nice ending and it might even re-unite bitcoin again, but knowing men, and their stubbornness, it is perhaps too wishful dreaming. But one can hope that reason in the end prevails.

 

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