Block Size War

Between August 2015 and November 2017, Bitcoin nearly tore itself apart over a single number: the 1 megabyte cap on how much data each block can hold. Satoshi added that limit in 2010 as an anti-spam measure. By 2015 blocks were filling up, fees were climbing, and the community could not agree on what to do about it.

The big-blockers wanted to raise the limit so more transactions would fit on-chain and fees would stay low. Their case was that Bitcoin should work as cheap digital cash, and that a bigger block size was the obvious fix. The camp included Gavin Andresen, Mike Hearn, Roger Ver, and large mining operations led by Bitmain's Jihan Wu. They shipped competing software meant to replace Bitcoin Core and lift the cap: Bitcoin XT in 2015, Bitcoin Classic in 2016, and Bitcoin Unlimited in 2016-17. BIP-101 was the first concrete proposal, jumping straight to 8 MB.

The small-blockers wanted to keep blocks small. Their case was that big blocks make running a full node more expensive, which pushes ordinary users off the network and concentrates control in a handful of data centers. They preferred to scale in layers: improve the data efficiency on the base chain, then move volume to systems built on top of it like the Lightning Network. Most of the Bitcoin Core development group sat in this camp.

SegWit was the small-block path forward. It was a soft fork that fixed transaction malleability, raised effective capacity to roughly 4 million weight units without a hard fork, and cleared the way for Lightning. But it needed 95 percent of miners to signal support, and the miners aligned with the big-block camp refused to signal.

The deadlock broke in 2017. In May, a group of companies and mining pools signed the New York Agreement, a deal known as SegWit2x: activate SegWit first, then hard fork to 2 MB blocks about three months later. Bitcoin Core developers were not part of the deal, and many users read it as a backroom attempt to take over the protocol.

The pushback took the form of BIP-148, a user-activated soft fork. It set August 1, 2017 as a flag day on which nodes would reject any block that did not signal SegWit, with or without the miners' cooperation. Facing a possible chain split, miners activated SegWit through a compromise mechanism (BIP-91) in July. SegWit locked in and activated at block 481,824 on August 24, 2017.

The faction that still wanted bigger blocks forked away on August 1 as Bitcoin Cash. The second half of SegWit2x, the 2 MB hard fork, was scheduled for that November and then called off on November 8, 2017 for lack of consensus.

The war settled a bigger question than block size. The people running full nodes, the economic majority, held the final say over the rules - not the miners, and not the companies that signed the agreement. That is the central claim of Bitcoin governance, and the block size war is the case study that tested it in real conditions.