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Blogs & Articles: The Blocksize War Review 🔗 3 years ago

Nic Carter on Medium

An excellent account of a revealing epoch in Bitcoin’s history

Sometimes a text comes along that you feel a powerful obligation to read. Jonny Bier’s The Blocksize War ($22 for the paperback on Amazon) is one such book. Bier is the rarely-seen face of BitMEX Research, arguably the most insightful research desk in the industry. BitMEX Research consistently produces original content, spanning a vast array of technical, historical, financial, and economic concepts. Bier’s repertoire is incredibly vast, and betrays a deep understanding of protocol design, crypto markets, and the broader macro context. BitMEX Research is a wonderful free asset to the Bitcoin community, and I would be bitterly disappointed if Bier stopped publishing.

So when The Blocksize War was released I picked it up immediately. I had been paying fairly close attention to Bitcoin from 2014 onwards, initially on Reddit and later on Twitter, but I simply hadn’t appreciated the conflict in its earliest stages, so I was excited to brush up on my historical knowledge. I was vaguely aware of the existence of conflict but I had completely missed the early skirmishes in the Blocksize War. Many accounts of the war will begin in 2017, but the conflict of visions really originates in 2015, as Bier points out.

The conflict in its simplest form focuses on what seems like a relatively incidental technical feature: how big should bitcoin blocks be? But as it turns out, this apparently technical discussion is a proxy for much deeper questions of governance, political control, and the very nature of the protocol. What is Bitcoin? What should it be? How should it develop? How should it change? In the end, this debate raged from 2015 to 2019 or so. Hundreds of millions or billions of dollars were spent fighting it. It was effectively the sole developer focus in 2017. As the community once again prepares to introduce a protocol change with Schnorr/Taproot, it’s worth revisiting the changes that culminated in that tempestuous year.

Bier’s book is remarkable; it’s largely a first-hand account. As anyone who followed this debate over the last half decade will know, actually being present for the various skirmishes was no small task. Impressively, as he details in the book, he put himself through considerable rigors in order to witness the major junctures of the conflict: the in-person scaling conferences in Montreal, Hong Kong, and New York, among others. Very few individuals would have had the perspective and the direct first hand experience (or the diligence to take copious notes of panel discussions) to create an authoritative account of the conflict. Many times I found myself thinking how lucky we are to have such a committed correspondent chronicling these events in real time with no agenda other than witnessing history. In hindsight, we know that the blocksize wars were absolutely critical for understanding Bitcoin governance and consensus — vital historical markers that are part of our accumulated knowledge. But it took considerable foresight to know ahead of time just how consequential these itinerant informal meetings would be.

Usefully, Bier is also laudably dispassionate, although, as is the case with people with common sense, he maintains an ultimate allegiance to the small blocker camp. I’m very impressed with his ability to stay balanced. This was a conflict which strained the nerves of everyone remotely interested in Bitcoin.

Like many other historical events, people are prone to reduce the causal features of the debate and characterize the disagreement in simple, stark terms. This book does a good job of debunking any monocausal explanation for the difference of visions. Bier admirably captures the many different facets of the conflict. They range from technical arguments, to governance considerations, to short versus long term approaches to development, to business versus technical considerations, to financial interests, and to simple matters of pride and hubris. And of course, at the core of the debate, a battle for the soul of the protocol: what did Satoshi really intend? What kind of system ought Bitcoin be?

One recurrent motif that I particularly enjoyed was the occasional digression into how a largely digital conflict — happening on the blockchain, on mailing lists, on forums, reddit and twitter — occasionally strayed into the real world. In one instance, he finds mysterious messages on the blockchain and rushes out to a warehouse in Hong Kong. He abandons a mountain hike to dash to a closed-door meeting. He is out of sick days from his asset management job and flies transatlantic to a conference over a weekend, returning to work on monday, bleary eyed and exhausted.

If nothing else, this book is a fine ending to a saga that was both thrilling and deeply unpleasant at times. Newcomers who didn’t witness the final throes of the conflict in 2017 would do well to read it. The events surrounding UASF and NO2X are, in my opinion, the most important signifiers of Bitcoin’s uniquely poised governance. We would do well not to forget them: the price of freedom is eternal vigilance.

Today, we have the benefit of hindsight to reflect on the big block ideology. It has become decidedly less popular as big blockers actually had the space to implement their ideas through chains like BCH and BSV, among others. All of the technical and governance arguments that Bitcoiners made — which were largely theoretical in 2015/16— have now been tested in the real world. Predictably, the big block chains are suffering exactly the issues we expected. They have no ‘merchant adoption’, no meaningful fees (and hence no viable long term security model), and tons of spam. To no one’s surprise, nodes on big-block chains are difficult to run and regular users are disempowered. The pro-fragmentation philosophy whereby debates were resolved with forks unsurprisingly led to many more forks: anathema to protocols whose usefulness is defined by network size.

Even former BCH/big block allies like Ethereum’s Vitalik Buterin now largely distance themselves from the large block philosophy. Ethereum, with its new emphasis on monetary soundness, a durable fee market, and scaling in layers through deferred settlement (sidechains, rollups etc), has grown to embrace a philosophy that is decidedly (small block) Bitcoin-like. And predictably, the absolutely unforgivable elevation of the odious fraudster Craig Wright completely backfired on the big blockers, who now almost universally regret welcoming him into the fold. Moves like this revealed the naked truth of the big block campaign: a movement grounded in ressentiment against Bitcoin Core and an attempt to capture the name and brand. There was no meaningful technical question, ultimately. As Bier points out, the big blockers were free to implement their meritless ideas to their heart’s pleasure. Really, it was a sequence of debates about who should control the Bitcoin protocol itself.

One particularly astute point Bier makes, and one that I agree with, is the notion that Bitcoin is really just a vessel for your expectations, hopes, and dreams. Ultimately, the small blockers were simply more adept at framing a narrative around what Bitcoin should be, and in laying out a path to get there. The strength of a coordinated, consistent, and viable roadmap and narrative is incredibly powerful. Few appreciate the sheer intellectual capital being put into bitcoin. At the end of the day, it was this sustained narrative which carried the debate and fended off attacks from highly-motivated and well-financed individuals and entities.

In the final calculus, the book is as much a history of a technical conflict over Bitcoin as it is a story of a scrappy band of Bitcoiners resisting successive waves of takeover attempts from various factions: first Gavin and Mike Hearn with XT, then Classic, then Unlimited, then Bitmain and Chinese miners, and lastly a western industry cartel. Unsurprisingly, Bier does an admirable job of capturing the nuances, and providing plausible explanations for the behavior of all involved parties. He’s certainly more balanced than I would have been. I feel more than a twinge of anger reflecting on Coinbase’s embrace of the meritless Bitcoin Cash, and the momentary fear I felt as it traded over $4000.

I will warn would-be readers: the typesetting on the paperback leaves something to be desired, as the margins on the right hand pages are slim. The emphasis is on the content and the approach is utilitarian. Bier also loves a comma splice or two. But he has an affable and transparent manner, and the reader easily forgives the occasional typo. I’d recommend the Kindle version if you are a stickler for style. Hopefully we see a revised second edition.

My other wish would be a longer epilogue. The big blockers have now been completely discredited, and most of their primary leaders have been exposed as rank opportunists. Predictably, the large block ‘community’ has effectively dissolved into a mess of forks, misspent effort, and infighting. Bitcoin by contrast goes from strength to strength and the layered scaling model has been entirely vindicated. The various large block chains are abandoned wastelands, trading at all-time lows against Bitcoin. This is notable: ‘let the market decide’ was the big block refrain for years. Well, the market decided. The small blockers who suffered large block imbecility and intransigence for years deserve a triumphant coda. History is written by the victors, right?

Bier deserves much praise for his diligence compiling this text. It’s a worthy addition to the Bitcoin canon — one I hope to add to some day.

The Blocksize War is available on Amazon and will be published in its entirety in installments on the BitMEX Research blog. 50% of profits from physical sales will go to Medecins Sans Frontieres.

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