It was an extremely stressful time. We were patching bugs, and as soon as we did the hackers would come up with another attack. We went back and forth, for months. We’d think we finally overcame the attack, to then only be hit again.
Did you win in the end?
Bitcoin, loved by many, hated by some, always had a strong knit community with a shared goal – to let others know what it can achieve, to persuade merchants to accept it, to make banking more equitable.
What started seven years ago as worthless, seemed at one point to be unstoppable. Despite bitcoin’s many faults, the currency continued to attract users, businesses, merchants, investments. It promised decentralized and global programmable money. Cheap, almost instant and frictionless transfer of value.
It became so successful that it now had to increase capacity to welcome new users by changing a limit of 1MB in blocksize which equals to roughly 200,000 transactions a day, or approximately 3 per second, to a higher limit.
However, what was considered only a few years ago to be a simple solution and a foregone conclusion, so recommended by Satoshi Nakamoto himself before he left, turned bitcoiners against bitcoiners, friends into enemies, reasonable heads into parroting trolls, and the bitcoin community into a metaphorical war zone.
“Forking Bitcoin-Qt/Core has been coming up more and more often lately in conversation (up from zero not that long ago)… The Bitcoin developers have effectively become the new financial regulators: restricting options within their jurisdiction with “someone might do something risky” being used as the justification… If we carry on as now there simply won’t be any usable decentralized wallets left and Bitcoin will have become an energy-wasting backbone for a bunch of banks and payment processors. That’s so far from your original vision, it’s sad.”
Mike Hearn and Gavin Andresen, estimating an increase in bitcoin transactions to the point where there would be no further capacity in the coming months, suggested during Spring 2015 an increase of the blocksize limit to 8MB doubling every two years for the next two decades in line, they claimed, with Moor’s Law. Introducing the reasons in an article entitled “Crash Landing,” Mike Hearn stated:
“How do you think ordinary Bitcoin users would react on hearing of crashing nodes, a swelling transaction backlog, a sudden spike in double spending, skyrocketing fees … and all of it because of an entirely predictable event with an incredibly simple fix?…
Bitcoin would survive. But it would have lost critical momentum. It would have become the MySpace of digital currencies. The faithful would have lost a lot of faith, and businesses that were trying to bring Bitcoin to the mainstream would “pivot” towards something else. People who were motivated by Making The World A Better Place™ would conclude the ordinary people around them would never use their products, and so they’d leave.”
To prove the point some bitcoiners started spamming the bitcoin network with transactions aimed at reaching maximum capacity, calling it a test, but others saw an increase of the blocksize to 8MB doubling every two years as an attack on bitcoin. If the bitcoin community wants to commit suicide, I’ll leave to work on something else, stated Gregory Maxwell at the time.
Alongside Peter Todd and others, he argued that an increase of the blocksize would lead to datacentre nodes which would centralize bitcoin.
Although many often asked for a definition of decentralization in the context of the blocksize, for what increase they thought reasonable, few, if any answers were given save for a suggestion that everyone can use layer 2 protocols, such as lightning or perhaps sidechains, which remain under development.
Critics argued that lightning would centralize bitcoin into hubs and does not exist. Thus the lines were drawn with both sides accusing the other that their solution would centralize bitcoin, with no one, as of now, succeeding in reaching a way forward.
With the positions so laid out and both sides convinced that their solution saves bitcoin while the alternative kills it, metaphorical carnage met the community on August 15th 2015 when Theymos, the top moderator of r/bitcoin, declared a new policy which classified the XT client as an altcoin and, therefore, under the long standing rules of that subreddit, submissions or comments related to XT were no longer allowed.
The community was outraged with, later on, Jeff Garzik, a committer to bitcoin code and a long standing contributor, stating that the definition of an altcoin was a blockchain which used a different genesis block than the one created on the 3rd of January 2009, a definition that XT did not meet. However, Theymos did not change his opinion. Instead, he instituted a policy of banning and censorship which shocked the community with thousands unsubscribing and leaving for other subreddits.
With the division now physical in virtual space, vicious rhetorical attacks began on both sides, with accusations of reddit users being en mass sockpupets or trolls, for profit companies plotting to reduce bitcoin’s appeal to sell their own products, all sorts of accusations in regards to perceived lead bitcoin developers, and a general atmosphere of vitriol.
On September 2015, XT nodes came under a DDoS attack so large that half of the city of a node operator was cut off from the internet. From approximately 1,200 nodes, the number went down rapidly to 500, to then recover to 800.
Slush Pool, a mining pool which had recently began using the XT client to mine blocks, was specifically and successfully targeted, cutting them off the network. Rumors were that the attack was sophisticated and professional in nature with few having the necessary knowledge to undertake it.
By this point most of the miners had declared that they would not be running XT, but a new proposal, called BIP 100, which was never implemented. The attack succeeded however in entrenching the divisions, with the issue now starting to become personified and no longer about capacity. The verbal rhetoric started becoming heated, the language militaristic, with the more extreme elements declaring war.
One of the few who tried to bridge the gap was Adam Back, the President of Blockstream, a company co-founded by Gregory Maxwell, Pieter Wuille, and many other bitcoin developers, who suggested an increase to 2MB immediately, doubling to 4, then 8.
Gavin Andresen stated at the time that he was not against it and if Adam Back could get everyone at Blockstream to agree then a compromise may be reached. A big “Scalability Workshop” was held in Hong Kong in December 2015 with most of the miners present where almost everyone was expecting for the 2-4-8 suggestion to be put forward.
To the surprise of most, a different proposal was suggested, called segregated witnesses (segwit), which among many features, increases capacity ranging from 1.1 to 1.7MB depending on who you ask and faced many criticisms, including allegations that it fully transforms bitcoin’s economics.
As most of the miners had agreed to 2-4-8 by this point, Jonathan Toomim, a miner himself, after carrying out some tests which show that up to around 4MB was perfectly safe without any further optimizations to the network, was approached by miners, almost all of whom expressed agreement to a 2MB increase.
Bitcoin Classic was thus announced in collaboration with Gavin Andresen, Jeff Garzik and many others, which increases the blocksize to 2MB only, through a hardfork, 28 days after 75% of the one thousand last blocks are mined with the Classic client, a client that found wide support, including the majority of miners, as soon as it was announced.
However, even before the announcement, extremist elements were declaring war, calling it XT2.0. Instead of capacity, the discussion now turned into hardfork vs softfork, about who is an expert, about “consensus”, about individuals, about companies, about miners, about anything and everything except for the underlying issue. Slowly, what had the support of the majority of miners, found itself having the support of almost none.
An allegedly secret roundtable meeting with most miners and some blockstream and bitcoin developers, but no attendance by any bitcoin developer who contributes to Bitcoin Classic because, they claim, they were invited only two or three days ahead, announced that “consensus” had been reached for no maxblocksize increase any earlier than July 2017, an announcement that was met with wide opposition, including by a Blockstream co-founder.
Two or three days after the “roundtable consensus” announcement, transaction capacity was reaching full limit. Transactions started delaying and going unconfirmed, people started complaining, users started leaving to Ethereum and other currencies which had gained hundreds of millions in market cap in recent weeks, price started falling, panic was brewing.
Suddenly, the so called “consensus” was shred to pieces. Knc miners started mining Bitcoin Classic blocks, F2Pool, one of the largest bitcoin pool with approximately 25% hashrate on average stated that they felt cheated by Adam Back who had signed the consensus agreement as Blockstream President in the Chinese version, but as an individual in the English version. “We do not know how we can trust blockstream again” – F2Pool commented, announcing that they will offer their miners the choice of mining with the Bitcoin Classic version.
F2Pool was DDoSed. The website of the CEO of Bitgo – a prominent bitcoin company – was DDoSed after writing an article entitled who votes for the blocksize increase. Bitcoin Classic nodes are currently under heavy DDoS.
That brings us to the present where the atmosphere in the community is riddled with conspiracy theories, allegations and counter allegations, accusations and counteraccusations, everyone constantly at everyone’s throat.
More worryingly, mechanisms have been put in place to take full control of the narrative in regards to bitcoin development. The bitcoin mailing list is heavily moderated. The bitcoin IRC channels where much bitcoin development discussion takes place are likewise under tight control. The biggest bitcoin forums engage in open censorship. Rumors are that extremists elements of bitcoin are moving to shun all reasonable voices and drive them away, with Luke-Jr, a bitcoin developer and blockstream contractor recently commenting that he could not see how “they” could work with Gavin Andresen or Jeff Garzik moving forward.
What was once a dream of liberation has turned into a nightmare of control, with bitcoin staring at the abyss, for what once was bitcoin, some argue, is no more.