Attention this week has so far focused on a group of bitcoin users that successfully split off the blockchain to form their own cryptocurrency.
But fascinating as the real-time market creation of Bitcoin Cash has been, for those who have closely watched developments, August 1 marked another lesser-acknowledged milestone – the passing of the deadline for a controversial scaling proposal Bitcoin Improvement Proposal (BIP) 148.
That’s when a vocal group of users had scheduled a so-called “Independence Day.” The goal was to push through a long-stalled coding optimization called Segregated Witness (SegWit), designed to increase and redefine the network’s capacity. The software upgrade would find node operators (users who store transaction history) initiating the move, hoping to lead the way for miners and startups.
And while it’s faded a bit into the background, you could argue that, even amidst a busy season for scaling proposals, BIP 148 was perhaps the most influential.
The scaling “agreement” Segwit2x followed soon after, proposing to add a feature that BIP 148 wouldn’t have provided: a boost to the block size parameter. Bitcoin Cash was even more explicitly a response to BIP 148 – hence, why both were scheduled for the same day.
But those two proposals had one other thing in common, and that was giving some degree of power over the software transition to the miners that secure the blockchain.
Before its introduction, for example, SegWit had stalled for months due to its reliance on the idea miners would signal support to activate the change. However, only about 25 to 50% of mining pools did so from November to June.
Then, suddenly, two weeks before the scheduled UASF, and with little time to spare, mining pools rallied around either Segwit2x or BIP 91 on its own, to activate SegWit.
UASF supporters don’t see this as a coincidence.
Blockchain startup founder Ragnar Lifthrasir, a public UASF proponent, told :
“UASF worked as designed and predicted, it is activating SegWit.”
Balance of power
It’s a narrative that adds evidence to the idea that some changes to the bitcoin protocol (and perhaps all public blockchains) are destined to be political.
As ethereum classic and bitcoin cash have now proved, there’s capital to be created in splits. The more nuanced argument is that they also seek to aid research and understanding of the science behind open blockchains, though with economic risk to users.
In bitcoin, it could be said the scaling debate has called to mind the balance of power between its major network participants – startups, miners, developers and users. And the argument continues to be that UASF was a movement of the people, one that like any social revolution, was perhaps destined to be feared by the powers that be.
While bitcoin users may be predisposed to such narratives, it’s certainly one that has resonated with supporters.
“We found out that not just miners, but some VCs and bitcoin startups didn’t like the power of users, that’s why they came up with Segwit2x, to obscure UASF’s success and precedent,” Lifthrasir he said.
He argues that it was a question of incentives. Mining pools didn’t want to risk that their 12.5 bitcoin block rewards (worth approximately $33,000 today) would be rejected, but they didn’t want to support the UASF effort.
“This means hashing power follows nodes and users, not the reverse,” Lifthrasir argued, and he isn’t the only UASF supporter to feel this way (or that this is important).
“Basically, BIP 148 was an early success,” remarked Bitcoin Core developer Luke Dashjr, one of the UASF’s more ardent supporters.
In the end, BIP 148 was sidestepped by another network proposal. But it’s the mere threat of action, supporters argue, was enough.
Calin Culianu, a developer for Bitcoin Cash, the version of the bitcoin protocol boasting no SegWit and 8MB blocks, even agreed that Segwit2x was likely a response to BIP 148 on some level.
Although, Culianu has a different way of thinking about it, arguing that BIP 148 supporters used scare tactics to make it sound like it had more support than it did.
“Miners got antsy, people got scared and everyone met in New York to hash out a plan,” he said, alluding to how Segwit2x was originally determined.
The question now seems whether this tactic is good for bitcoin’s development.
Culianu almost seesawed on the question of whether UASF was a good thing for his project, as it could be said it spurred the “big block movement” to action.
“UASF was the spark that made all this happen, for better or for worse.”