Block Size Fork Ahead: Are Your Bitcoins Safe?
Bitcoin has been going through quite a debate concerning its block size. There’s something new going on with the discussion nearly every single day. Unfortunately, not everyone is available all the time to follow the conversation from point to point and this has led to some confusion. Today, we will discuss some commonly asked questions […]
Bitcoin has been going through quite a debate concerning its block size. There’s something new going on with the discussion nearly every single day. Unfortunately, not everyone is available all the time to follow the conversation from point to point and this has led to some confusion. Today, we will discuss some commonly asked questions about the subject to help ease people’s frustrations.
Will My Bitcoins Be Ok?
There is one very important question that gets asked quite frequently by new users — and even Bitcoin veterans. “Is my bitcoin ok if there is a hard or soft fork?” The answer is yes. If you hold your coins in a wallet or offline before a code change, your existing digital currency born before the fork will be totally fine. They will all be valid and still be reliable in the future as only the road they travel on is modified.
What Is The Block Size Debate?
Miners look for blocks in the network; these blocks are limited to 1MB in size. Because the block size is 1MB, anything over that limit is considered invalid throughout the network.
There are a few reasons why people would like to scale up this size. The most common arguments for making blocks bigger are increased transactions per second, and the claim that larger blocks will allow the network to handle more volume. There are other proposed positives to the growth in blocks as well such as off chain solutions, side chains and other implementations that could alleviate malleability attacks. This side of the debate believes the Blockchain is bloated and increasing the size of blocks is the solution.
The next camp includes those who want to do nothing at all or scale it slowly with smaller blocks. People who are opposed to larger blocks say that hard forking the code can be dangerous and increasing the block size may not solve the problems of contention. There is also the argument of centralization that could increase because larger blocks may increase the expense of full nodes.
Both sides of the debate have their own individual points, and much of the discussion has moved forward to many agreeing for some type of increase. Proposals of the increase have been upwards of 8 MB-20 MB over the course of the past year. However, in the first month of 2016, many seem to be gravitating towards a 2 MB consensus, though still to this day, no official agreement has been reached, and the conversation continues. The introduction of certain concepts that have come to light recently has increased the chances of consensus. The latest Bitcoin Classic proposal and segregated witness ideas have been gaining in popularity, but nothing is set in stone yet.
What Is A Fork?
A hard fork is a change in the protocol that veers or “forks” the code into a separate direction, and the previous code becomes invalid. This means the protocol has a new set of rules the network must abide by or agree upon. A majority consensus of key members within the system must agree upon the changes including miners, wallet providers, and exchanges. Again, changes to the code do not revert your existing bitcoin in any way and what you hold now will always be valid tomorrow.
A “BIP” is the acronym for “Bitcoin Improvement Proposal” and this can cover many of the concepts brought to the table concerning code change. The BIP concept was created in 2011 by Amir Taaki, who explained its purpose in BIP 0001.
What is Bitcoin Classic?
Bitcoin Classic is a modification to the code for an “immediate 2MB increase,” according to the website’s proposal. It also acknowledges a “demand amongst users for 8MB or more,” recorded on the bitcoin consider.it website. Contributing developers are Jonathan Toomim, Gavin Andresen, Ahmed Bodiwala, Jeff Garzik, Peter Rizun, and others.
The project will begin with a “one-feature patch to bitcoin-core that increases the block size limit to 2MB.” Quite a few companies and Bitcoin operations have shown they may support this code patch. Some businesses include Bitmain/Antpool, Coinbase, Blockchain.info, Bread Wallet, BitFury, Xapo, and Bitstamp. The entire list of supporters and an exact description of Bitcoin Classic can be found on its official website.
For the record. Bitstamp supports blocksize increase to 2MB. https://t.co/q2zLXHWJSH
— Nejc Kodrič (@nejc_kodric) January 15, 2016
Is Bitcoin Dead or a Failure?
Bitcoin still processes payments and still has low fees associated with transactions in the network. In fact, many would agree that it may be the remittance king in the coming years. Quite a few people would disagree with former Bitcoin developer Mike Hearn’s recent accusation of erratic fees, and people being unable to settle transactions. The protocol and community behind the network remain active, and the digital currency is not dead.
The discussions and ideas to fix the issues are in greater numbers than ever before. Miners, exchanges, users, and engineers are continuing their efforts to resolve the problems at hand, and all of them do not believe the currency is failing. Most supporters are doing this by continuing their efforts with strategic behavior. In a recent Medium blog post called “Keep Calm And Bitcoin On,” BitFury Co-Founder Valery Vavilov details his belief that the currency is just the beginning of the experiment. Vavilov says:
“Needless to say, it was disappointing to see Mike Hearn, a prominent contributor to the Bitcoin developer community, recently offer a lengthy blog post stating that the industry was dead and that bitcoin was a failed experiment. Perhaps the road for Hearn has come to an end, but for me and my many colleagues and fellow Bitcoin Blockchain experts, it is safe to say that we are just beginning down this incredible road, and we see a promising future.”
The mainstream media has been relentlessly printing articles of Bitcoin’s demise. Quite a few people have accused Hearn of creating a “bankcoin” or outright sabotaging the community with his post. Others have dismissed the conspiracy theories and just wished Hearn the best while quite a few have said “good riddance” after his display. Hearn denies these latest accusations in his most recent post on Medium after his exit speech saying, “R3 is not a Bitcoin company or even a cryptocurrency company, and there is no “BankCoin” or “R3Coin.”
Now, it appears that Hearn’s blog post will fade into the Bitcoin obituaries list as the world’s first decentralized currency continues to chug along. The current debate is a natural process on the road towards consensus. This is especially true in an open-source and decentralized environment. People will fight and disagree, and as the network moves forward these problems will be eventually resolved.
“Open-source projects are not perfect, but they unite the best and most innovative thinkers, and I am honored to be a part of this mission,” says the BitFury Co-Founder.
Do you have questions about the block size debate? Let us know in the comments below!
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