[POSTPONED] Bitcoin network upgrade at block 494,784
In order to reduce transaction fees, improve confirmation reliability, and provide additional capacity for the growing number of bitcoin users, the bitcoin network is being upgraded, mid-November, at block 494,784.
For the majority of bitcoin users, the upgrade will be seamless — no action is required on their part.
Technical details, simplified
Every ten minutes, on average, a miner finds a solution to the “bitcoin mining puzzle,” which allows her to issue herself 12.5 new bitcoins. It is through this process that new bitcoins enter circulation (Fig. 1).
Miners can also include a digital fingerprint (root hash) of recent transactions when mining, as shown in Fig. 2. When the next puzzle is solved, we say that those transactions become “confirmed,” because their fingerprint is now embedded within the puzzle’s solution. We refer to this solution along with the confirmed transactions as a “block,” and the chain of these blocks as the blockchain — the record of all confirmed bitcoin transactions to date. Miners have an incentive to confirm transactions in new blocks because they get to claim the fees offered by those transactions.
Currently, the majority of miners enforce a rule that affects the number of transactions that can be confirmed per block. Specifically, the rule states that the number of bytes in a block of standard bitcoin transactions must be no greater than 1 MB. This works out to approximately 2,000 transactions every 10 minutes, or roughly 3 transactions per second.
Starting at block 494,784, this rule will be loosened to 2 MB, effectively doubling the maximum capacity of the bitcoin network to approximately 6 transactions per second.
The upgrade has been carefully planned and follows the path set out by Satoshi Nakamoto in 2010. The loosening of the block size limit is encoded in bitcoin mining nodes as follows:
if (block_height ≥ 494,784) max_block_size = 2 MB
In addition to this, there is a second requirement that the block mined at height 494,784 have a size greater than 1 MB. For further technical details, refer to BUIP055.
What this means for SPV wallets
Because a SPV wallet downloads only the solutions to the mining puzzles (known as the block headers), along with any transactions relevant to the wallet’s owner, a SPV wallet is blind to the number of bytes in a given block. For this reason, the Bitcoin network upgrade will be seamless and invisible to SPV wallets.
No action is required from SPV wallet users.
What this means for Bitcoin Unlimited node operators
The Bitcoin Unlimited software is configured by default to accept blocks up to 16 MB in size. Because 16 MB is greater than the new maximum size of blocks that miners will produce (2 MB), the network upgrade will be seamless and invisible to BU nodes.
No action is required from Bitcoin Unlimited node operators.
What this means for Bitcoin Unlimited miners
The network upgrade will not be invisible to bitcoin miners. Miners must ensure that their nodes are configured to accept up to 2 MB blocks effective from block 494,784 onward. In addition to this requirement, the size of block 494,784 must be greater than 1,000,000 bytes.
Miners can choose to meet these requirements manually through the BU client interface; however, we recommend that miners run the BTC1 client through the upgrade period. The BTC1 client was designed to implement the upgrade requirements automatically.
The November upgrade is the first in a series of upgrades that will take place over the coming years to scale up the bitcoin network to a global payment system usable by all of our world’s 8 billion inhabitants.