Increasing the Block Size Limit
At BitPay we wanted to be helpful in promoting a consensus reached by key developers in the community regarding the future of the block size limit. We didn’t want to enter the debate directly, but instead listen to and consider the arguments thoughtfully and independently. Once a consensus was reached, and assuming we didn’t have major issues with it, we would then express our support and work together to move forward with the plan. While the debate continues, it does appear we are as close to a consensus among key developers as we are likely to achieve.
In our opinion, BIP 101 should be pulled into Bitcoin Core.
Currently, the block size limit is hard-coded to 1mb, which constrains overall transaction throughput. BIP101 proposes to increase that limit to 8mb after January of 2016 when a supermajority (>75%) of the blocks being mined indicate they support the increase. The limit on block size will double every two years after that until it reaches 8gb in 2036. There is plenty of discussion about whether this is the right schedule and why an increase is needed that I won’t rehash here, but we don’t believe this proposal would risk the integrity of the Bitcoin system, and we believe the block size does need to be increased. A notable feature of this proposal is that it does not preclude soft forks in the future that adjust the limit downward or that simply delay the next doubling of the limit.
As we considered the implications of a block size increase, preservation of the decentralized nature of Bitcoin was the most important consideration. If decentralization is ever compromised, Bitcoin will eventually perish. If Bitcoin is not decentralized, you may as well simply allow those that control Bitcoin to operate a centralized (or pseudo decentralized / federated) database. It would be far more efficient than the current Bitcoin block chain. However, the more likely outcome is that a decentralized competitor would overtake Bitcoin.
We think it’s important that a modestly-sized organization always finds it desirable and affordable to operate their own fully validating node. If only a handful of internet infrastructure companies could afford to operate fully validating nodes, then those companies would control Bitcoin. If a vast majority of people trusted those nodes, those companies would effectively have censorship authority over Bitcoin.
Regarding the governance of open source projects like Bitcoin Core, it has been asserted that the most successful open source projects have a strong leader that sets the direction and agenda for the project. I believe that’s true, but I would add that the leaders of successful open source projects are also good at getting the consensus of key contributors on important topics.
While this issue has been divisive in some respects, I think it’s valuable to acknowledge that the Bitcoin Core maintainers and contributors have already successfully navigated harder problems in the network’s first 6 years of growth, and I’m confident that Bitcoin’s development community will continue to be its greatest asset.
In summary, we believe BIP 101 will safeguard Bitcoin’s decentralized nature while providing a reliable, immediate path toward greater network throughput, and we would like to express our support for merging BIP 101 into Bitcoin Core.