About Bitcoin Forks and Scaling
Debunking myths about the Bitcoin ABC “Cash Fork”
As part of my work, I was just researching what today’s crypto media explains about “scaling Bitcoin” and was surprised about the misinformation they share in their side notes.
The way they describe the history of the Bitcoin Cash fork, as well as how the actual scaling approach is misrepresented, which was laid out clearly from the get-go as a technical roadmap by the Bitcoin ABC node development team since 2016, is staggering.
So let me straighten out and debunk some myths that are still being perpetuated by influencers and media in 2022/2023:
Myth 1: “Roger Ver created Bitcoin Cash”
If you are a key opinion leader and you believe or repeat this nonsense, then you are doing crypto a disservice.
The Cash fork was a last-ditch attempt by Bitcoin ABC, led by deadal nix to keep the Bitcoin project alive in the sense of it being a p2p electronic cash. Big players such as Jihan Wu from Bitmain have supported and funded this move as an emergency alternative. But Roger Ver and others reluctantly joined months later, when they finally realized that the negotiated scaling attempts on BTC wouldn’t be implemented as they hoped.
Myth 2: The proposal is to “simply keep increasing the block size, kicking the can down the road”
The increase of the block size was indeed the simple immediate solution and the most sane way to go. But as evidenced by the reasonable and achievable roadmap this was just one part of the whole set of the scaling solution. The idea to simply keep scaling the block size to a global scale without any other optimization or improvements has nothing to do with what was proposed by Bitcoin ABC.
Yes, we can and most likely will increase the block size up to gigabyte blocks over time. And yes, running a node will be akin to running a server rack in the future as opposed to a little Raspberry Pi. This is something people can argue about and have argued about a lot — course would conclude that the increased cost of running a node even at a higher scale and with higher block sizes is not that much more costly to achieve the required amount of distribution of nodes around the globe; while the idea that every goat herder in Afghanistan runs a satellite dish with a Raspberry Pi connected to it as a self-hosted lightning node is not just naive but everything but achievable, even if it would be technically “cheaper to run a node”. This isolated view and disregard for any other aspect of “running a node” is as silly as it gets.
What is even worse is that in many opinion pieces today it’s conceded that a block size increase will eventually be a step to be taken, “when needed”. As if the clogged network in 2017 was not the time when it “was needed”, right when Bitcoin was gaining worldwide recognition and was supported by companies like Microsoft and Steam with a legitimate shot at being a super convenient and ideal online currency. Online Banking and new Fin-Techs have improved the game since then, but Bitcoin didn’t just stop improving, it degraded.
In hindsight, but also predicted, it was the right way to increase at least once to 4–8 MB as was proposed by almost anyone besides the concern trolls around Blockstream, that would wrap weird anti-trust ideas into a fake anarchist decentralization narrative that would make baseless technical assumptions and misrepresent the big blocker’s scaling roadmap so much so that the myths are still perpetuated to this day.
With a 4 or 8MB block size increase BTC would not have fallen flat on its face during the 2017 run-up with its horrendous fees & network clogging. Which in turn resulted in the loss of business support and the perpetuation of the gullible idea that Bitcoin is inherently unscalable or should be “digital gold” as opposed to “p2p cash”
Myth 3: “The failure of BCH is evidence of the Big Block approach not working out”
The failure of BCH is profound and has various reasons, some of which are issues that BTC also has not solved, either. None of which are technical scaling issues, but rather social, cultural, and economical. It would be very important to dissect what went on because it would benefit all of crypto to be better equipped to solve issues that are inherent in every project — unfortunately, most people are not aware of them at all.
Besides, a lot of unjustified vilification as well as downright lies were spouted about the BCH project. As evidenced by the fact that media and influencers to this day perpetuate the nonsense that Roger or even CSW had anything to do with the creation of the cash fork and other baseless “scam” accusations. Many P2P Cash advocates and Big Blockers at heart would not want to be associated with the BCH project because they did not like to associate with BCH, or manz potential newcomers thinking it was just a rip-off that was trying to change the core protocol and with it its neutrality. However, they were bamboozled, as BCH was the attempt to stay true to the core idea of Bitcoin. This is why people point to the whitepaper all the time. Read the abstract and you know what Bitcoin was meant to be.
Of course, since it is never any different in any community, many users who were either not clever enough, didn’t like the drama, or simply were not good listeners would believe the lies told about BCH. Many with vested interest of course would go to great lengths to find anything to throw at the BCH project to paint it as a scam, even though it was simply a fork of an open source software and not only that — it was obviously in full right to keep the p2pcash vision alive and be associated with the Bitcoin brand. The whole argument about “BCH being the real Bitcoin” arose from these attacks against the obvious.
Today, people try to claim it was statements like that, which made them think of BCH being an imposter. But was the unjustified attacks and attempts to disregard it as a simple alternative fork to keep Bitcoin alive as the peer-2-peer cash system that made people double down on the fact that “BCH is Bitcoin”. Not the other way around. And in all honesty, while this is a stupid statement to make as it is confusing — it is in all aspects true. Bitcoin is a technology. BTC is but one implementation of that technology. BCH, XEC, and even BSV are implementations of Bitcoin. Deal with it.
Also, which of them was “the original” was solely based on the decisions of exchanges, after a lot of political games by a handful of maximalists that were not at all representing the majority of people, who favored scaling of course (as it was such an obvious thing to do with no downside). BCH could have gotten the original ticker and name, what then? Then what is BTC today would be the imposter all of a sudden? This is simply not the right way to go at it.
The idea that the brand says anything about the originality is a huge misunderstanding and who gets the brand and ticker was set arbitrarily by exchanges, anyway. The same thing has happened again during the BCHn/BCHabc fork.
Don’t get me wrong, there are also problems the BCH community as a whole did wrong and issues in Bitcoin such as funding — apparent both in BTC and BCH — that were not solved on BCH and were solved in a bad way on BTC, leading to capture of development by venture capital through Blockstream and ultimately the pivot of developments to those corporation’s liking, away from “electronic cash at Visa levels” into a “Digital gold settlement layer” approach benefitting the speculators and finance institutions.
A core idea of Bitcoin ABC was to not repeat the same mistake — corporate capture is a much bigger concern than the potential centralization issue presumably happening half a century in the future.
BCH ultimately split off again into what is BCH today and also XEC, led by the same development team — Bitcoin ABC — that created and maintained the BCH fork the entire time. Again, the brand name has been lost but the idea that the new network known as eCash is anything else than the initial idea of Bitcoin, or the Bitcoin Cash project for that matter, that was birthed and maintained since 2009 or 2017 respectively, is simply wrong.
Now, we don’t need to argue “which is the real BTC/BCH “— if you understand the nature of the fork you understand that ticker names and brand names or even network effects are not what constitutes a project. The whitepaper does. The idea does and if or if not the implementation tries to be true to the intended goal.
All in all eCash is working on what I joined in 2012, which was known as Bitcoin back then. In terms of what is being built and for waht prupose, nothing has changed by then apart from the added optional Avalanche integration. Besides of course the ticker and brand, which have little to do with underlying technological realities or the “originality” of a given project.
For your information, this is not trying to revert blame from the failures of the BCH community being mostly self-inflicted. It is not “all other people’s fault” and BCH can be ascribed blame for many of its failures. But what I stand by is that it has little to nothing to do with the engineering of the scaling approach. So media claiming that it ultimately was the wrong decision because BCH was not successful as a project, is again just confused thinking.
Looking at the Technology and Innovations on XEC
Blocks of 32 MB give Bitcoin the necessary capacity for many years to come to house enough transactions and give it the throughput needed. Even 8 MB was fine and would’ve solved a lot of BTC’s issues back then and today.
Sizes of that magnitude do not lead to node centralization at all. Abiding by this myth, stemming from concern trolling has led to far worse centralization via LN. While “ultra big blocks might lead to node centralization in 50 years, maybe” was the argument against scaling to 4 MB (somehow implying that you also have to commit to further increases beyond a certain impractical limit) now you hear continuously: “so what if I use a custodial wallet to make a payment over Lightning Network? As long as the base layer is decentralized I am fine with it” completely missing the core idea behind the invention of Bitcoin in the first place: Enabling transactions between two parties without having to rely on third parties.
It is mind-boggling to see people who were so hell-bent on a potential risk with lots of assumptions half a century in the future somehow can’t see the centralization implications of having no reliable way of making non-custodial transactions. Decentralization was a means to an end: censorship resistance and antifragility.
Today BTC advocates have missed the plot on why they always emphasized decentralization in the first place. If the security of the base layer is the only important aspect, they should start using gold again. Seriously, gold is a base layer that is even more unlikely to be captured or meddled with to inflate its issuance.
If you can think further than 2 inches, you see that the whole point why gold was not successful in upholding censorship resistance was because it had to defer its settlement onto a second layer which was paper money. So having a base layer even backed by god’s creation himself is not enough if the only way to make it liquid is custodial. It makes the whole value proposition of Bitcoin void, yet “deferred settlement via Lightning Network” is exactly the scaling solution proposed.
It is funny because people always said back then “No one needs a PayPal 2.0” when attacking the Big Block Bitcoin idea — again implying that it would be so centralized that censorship resistance wasn’t achievable, or the worse points following from that, namely that being able to make payments was somehow not important enough to even give it an afterthought. Completely asinine.
Just another Custodian
But now the same people are recreating a Paypal/Visa 2.0 Lightning Network and players like Strike at the helms. A network that is worse in any aspect from fees, speed, and reliability, to UX, while optimized Bitcoin like eCash is still a trustless, super efficient, and elegant electronic cash system that already has the capacity of networks such as PayPal, without any centralization concerns at all.
You can run your eCash node on any household PC if you like today and for many years to come. That may change in the future when throughput gets above today’s ~160 tps limit, but that is a trade-off far better than the immediate full-blown destruction of censorship resistance that we have already with Lightning Network, which ultimately doesn’t even achieve reliable, cheap, secure or fast payments at all. The cost of running a node capable of running an “end stage” eCash node is a little more than a beefy gaming PC. While not in every household, certainly nothing, that can’t be easily set up. With the Avalanche staking mechanism, it’d even make you profits.
At the very least, if you cannot accept that a Big Block Bitcoin such as BCH or XEC is sufficiently decentralized, according to your logic you could use those chains as your deferred second layer for transactions. On eCash for example it would be 100 times simpler, faster, and cheaper to send wrapped bitcoins on top of our SLP/eToken system than on LN, while it would be 100% non-custodial, far more reliable, faster, censorship-resistant, and with no downgrade in UX. This would simply be consistent. And as long as you are not abiding by your logic, you will keep changing narratives each year. Only someone, who does not think these conflicting statements through and does not hear out the alternatives will be convinced by them.
Summary
- Roger didn’t fork Bitcoin and was reluctant to support BCH at first.
- Bitcoin is scalable with the right optimizations; ABC’s roadmap is sound, not kicking the can down the road.
- 8–32MB blocks were the way to go without any centralization risk.
- Scaling constraints on BTC invited worse “centralization”, undermining censorship resistance of transactions.
- Any Bitcoin network needs to fix funding, or either lose by being underfunded (BCH) or captured (BTC). XEC did something about it and implemented an on-chain development funding system.
- Big Block Bitcoin could be at the very least a more secure, more decentralized, and non-custodial / censorship-resistant L2 than LN, but people will not accept it because it would wake a lot of people up to the simple fact that they can skip BTC altogether and use the supposed L2 which as their L1, since it is better in any way.
- Crypto-Space is full of myths and super bad research. You have to do your research if you want to know what is up.
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