bitcoin Bitcoin
ethereum Ethereum
polkadot Polkadot
ripple XRP
Show details

Block Size Debate Heats Up as SegWit Release Approaches

Reading Time: 3 minutes by on October 20, 2016 Bitcoin, Commentary, News, Tech
Follow by Email

As ViaBTC, a major bitcoin mining pool, shifted toward Bitcoin Unlimited and the eventual execution of a hard fork to increase the bitcoin block size by 8 MB, the debate between the supporters of Core solutions and Unlimited has become the main source of attraction for many bitcoin enthusiasts. Bitcoin experts argue that increasing the block size is unnecessary, as bitcoin was not designed to handle small payments.

Before all, Satoshi Nakamoto’s original Bitcoin White Paper stated:

“Transactions are not really possible, since financial institutions cannot avoid mediating disputes. The cost of mediation increases transaction costs, limiting the minimum practical transaction size and cutting off the possibility for small casual transactions, and there is a broader cost in the loss of ability to make non-reversible payments for nonreversible services.”


Bitcoin was not designed to handle micropayments since its initial launch in 2009. It was developed to create a trustless environment for anyone to send payments to one another without the existence of a mediator. That means, increasing transaction costs such as miners fee is the replacement for the presence of a third party authenticator, which is substantially more expensive if the costs of credit card and bank payments are considered.

However, as bitcoin began to gain mainstream attraction and more individuals started to utilize the cryptocurrency, for casual payments it transformed bitcoin into a cheap and anonymous form of money that anyone can use to settle small transactions with smaller fees. As the number of transactions began to rise and the block size limit was consistently tested, the fees rose naturally.

To satisfy the community’s demands, the Bitcoin Core development team released a series of solutions that could transform bitcoin into a global digital currency. Technologies like Segregated Witness (SegWit), Mimblewimble, and Lightning allow bitcoin to scale more efficiently, become completely anonymous, and handle micropayments.

Taking a step toward fulfilling the role of a truly, global currency, SegWit is due for release and activation on November 15. Bitcoin Core developers also just released the test for the upcoming SegWit update on October 19.

Most bitcoin experts agree to the integration of Lightning, a soft fork designed to enable micropayments, instead of hard forking the network to increase the block size, which experts perceive as a short-term fix for a long-term problem.

Moreover, writer and Bitcoin enthusiast Jacob Cohen Donelly wrote in a blog post:

“We already have problems with block propagation, which decreases miner profitability due to increased orphan rates. If the blocks grew significantly larger, that could increase (though there are wonderful efforts underway to decrease the problem) orphan rates, thus reducing profitability for miners further. This would be a centralizing effect.”


Under Bitcoin Unlimited, the bitcoin blockchain would eventually be hard-forked to 8 MB and every two years the block size would be double until it would reach 8 GB, in 2036.

Unlimited does not have a compatibility with SegWit and the move by ViaBTC to Unlimited may end up effectively blocking its wider release. ViaBTC stated their justification for choosing Bitcoin Unlimited, “…the switch to Bitcoin Unlimited is good for the long-term health of the network, since it brings finality and eliminates any future need to use either soft or hard forks to alter the block size.”

Also, Unlimited supporters stand against SegWit as they argue that the delay between actual implementation and enjoying its advantages will be 12 months and does little to alleviate congestion on the blockchain.

As the launch date for SegWit approaches, for a successful implementation, 95 percent of miners need to reach a consensus. However, the graphic below shows that Core is supported by roughly 85 percent of the network, taking into account the last 1,000 blocks that were mined.

A hard fork is not necessarily a scaling solution, it is merely a short-term fix to a problem that requires an extensive consideration for security and economic issues that may arise. Therefore, it is important to embrace the vision of Satoshi, opt for innovative scaling solutions, and cautiously approach in expanding the block size.

Like BTCMANAGER? Send us a tip!
Our Bitcoin Address: 3AbQrAyRsdM5NX5BQh8qWYePEpGjCYLCy4
Join our telegram channel