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Analysis of Bitcoin Block Size Debate

May 31, 2024

In a recent blog post, Ethereum cofounder Vitalik Buterin delved into one of Bitcoin's most debated topics, the block size war. This conflict, centered around Bitcoin's scalability and utility, revolved around the question of whether to increase the block size limit to accommodate more transactions and lower fees or to maintain smaller blocks for wider accessibility and decentralization.

Small Blockers vs. Big Blockers

Jonathan Bier's 'The Blocksize War' represents the small blockers, arguing that larger blocks would hinder node operation due to cost and technical complexity, promoting centralization. Small blockers advocated for minimal protocol changes and consensus among users. On the other hand, Roger Ver and Steve Patterson's 'Hijacking Bitcoin' voiced the big blockers' perspective, viewing Bitcoin as digital cash needing low fees for global transactions. They supported increasing block size to uphold low fees and restore Bitcoin's original intent.

Buterin's Analysis

Buterin introduced the concept of a 'one-sided competence trap,' where one side dominates technical expertise to push a specific agenda, leading to stalemates. He highlighted how small blockers controlled the technical narrative, while big blockers struggled to implement their ideas effectively. Buterin suggested future resolutions should embrace new technologies to bridge divides.

He cited Ethereum's adoption of ZK-SNARKs and BLS aggregation as models for scalable and decentralized solutions. Buterin envisioned a tech-driven evolution for Bitcoin, mentioning layer-2 solutions like Inscriptions and BitVM as paths to enhance scalability and decentralization within the Bitcoin ecosystem.

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