How Bitcoin Scaling Conflict Can be Resolved Between Developers and Miners

As the bitcoin industry and market continue to expand at an exponential rate, the community is expecting the activation of a viable scaling solution to address this growth.

The Bitcoin Core development team’s transaction malleability fix, Segregated Witness (Segwit), has been the preferred method of scaling by the industry. Even the mining community seems to agree to a conditional activation of Segwit.

One condition requested by the miners is the execution of a 2MB hard fork, as explained in the proposed New York Agreement drafted by 57 companies led by Digital Currency Group that represent more than 80 percent of global bitcoin hash rate. The mining community is willing to activate Segwit and optimize the bitcoin block size by around 75 percent given that a 2MB hard fork increase is guaranteed.

Why an Increase to 2MB?

Recently Jihan Wu, the co-founder of Bitmain and one of the most influential figures in the global mining community, was interviewed by Theo Goodman to discuss the scaling conflict between the mining and development communities. Wu addressed the possibility of activating Segwit and other controversial issues in the past such as AsicBoost.

During the interview, Wu expressed his concerns over the deserted Hong Kong Bitcoin scaling agreement and the dismissal of the original agreement to execute a 2MB block size increase by the Bitcoin Core development team.

Wu emphasized that despite previous agreements, Bitcoin Core dismissed the 2MB hard fork agreement and only presented Segwit as the sole scaling solution, which Bitmain along with other Chinese miners and mining pools do not care for.

The original Hong Kong bitcoin scaling roadmap agreed upon by the bitcoin mining community and Bitcoin Core contributors including Luke Dashjr, Matt Corallo and Peter Todd read:

“This hard-fork is expected to include features which are currently being discussed within technical communities, including an increase in the non-witness data to be around 2 MB, with the total size no more than 4 MB, and will only be adopted with broad support across the entire Bitcoin community. We will run a SegWit release in production by the time such a hard-fork is released in a version of Bitcoin Core.”

Wu and other bitcoin miners believe Bitcoin Core abandoned the previous agreement to increase the block size and focus on the development and roll out of Segwit. For this reason, the mining community has been persistent in requiring a conditional activation of Segwit. This is  the New York bitcoin scaling agreement was so clear on an execution of a 2MB hard fork after the activation of Segwit.

What Will Happen Next?

Experts and analysts also believe that the execution of both a soft fork and hard fork to scale the bitcoin network in a relatively short period of time is inefficient. Developers including Bitcoin Core contributor Luke Dashjr have found the New York bitcoin scaling agreement’s codebase Segwit2x to be untested and unsafe for deployment.

Figures such as Erik Voorhees have also begun to call for the activation of Segwit with “no strings attached.” At this point, the only way to resolve the scaling conflict between developers and miners is to come to a consensus on the best activation mechanism for Segwit and establish a long-term roadmap for bitcoin scaling.

Some believe that the execution of a 2MB hard fork may not be necessary upon the activation of Segwit. Thus, the development and mining communities can activate Segwit first and take a wait-and-see approach with the 2MB hard fork if it is still deemed necessary.