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From: Regardless of the moral status of his decision, Theymos was correct that moderation can be effectively used for manipulation. It can teach people that questioning the official narrative is unacceptable and will be punished, and in this case, it was critical to establishing the popularity of small-block ideas. To this day, newcomers have no idea they are only being presented with one perspective—a perspective that Satoshi himself would strongly disagree with. When the average person encounters the same information on multiple platforms, on the Bitcoin Wiki, and throughout the discussion forums, he will not even be aware that there is another perspective, much less have an informed opinion about it. Over time, that kind of information control is immensely powerful.
Ripple Effects
The decision to censor all discussion of BitcoinXT did not just infuriate regular Bitcoiners. It also upset fellow moderators. A few days after Theymos’ announcement, a dissident moderator “jratcliff63367” wrote a sharply critical article entitled, “Confessions of an r/Bitcoin moderator.” One section reads:
When theymos decided to use his centralized authority of r/bitcoin to stifle all debate and discussion of bitcoin-xt, he violated a core principle. As a decentralized peer-to-peer network, any point of centralized control is problematic… This one single person holds absolute centralized control of the two largest communications platforms for the community to discuss the future and evolution of bitcoin...
He exercises absolute power of what is, or is not, allowed to be discussed; including complete and total censorship power over the narrative in the two largest media outlets.7
Only ten days after jratcliff63367’s public criticism of Theymos, he was removed as a moderator from r/Bitcoin. He would later speculate that his removal was because of suggesting that the Core developers might be compromised:
It is not at all unreasonable to suppose that core-devs have been contacted by the ‘spooks’ and are applying influence. Crippling bitcoin so that almost all of the value has to flow through side-channels and only large institutions can access the core network would be a great solution to what world governments consider as a major problem…
The government doesn’t actually care if there is some new ‘asset class’ like bitcoin. There are zillions of asset classes, what do they care if it is bitcoins or beanie babies? What they care about is people transferring that value without their ability to track and intercept. If the only people who can directly access the blockchain are big-banks...well you get the idea.8
The same heavy-handed censorship still exists today, and the amount of people caught within this information bubble is much larger. The impact of these controls cannot be overstated. The enormous confusion surrounding Bitcoin exists, in large part, because of the deliberate efforts of a handful of people to filter out all information that challenges their narrative—and, ultimately, challenges their power. Unfortunately, mass censorship and propaganda were not the only tactics used against BitcoinXT. More aggressive measures were taken, too.
The DDoS Attacks Begin
SlushPool was one of many mining pools in Bitcoin. A mining pool is the standard way for miners to regulate their income. Without a pool, individual miners must wait until they personally find a block in order to earn any Bitcoins. But with a pool, miners put their hashing power together and share the block rewards, smoothing out their income considerably. Virtually all miners are part of a pool. So, when SlushPool was hit with a DDoS attack after allowing voting on BIP101, it affected a lot of people. On August 25th, 2015, Slushpool received a letter from the perpetrators, telling them the attacks would continue until they stopped supporting BitcoinXT.9 According to the MIT Technology Review:
Alena Vranova… said the company received a message saying that the attack would end once it turned off the ability for customers to declare support for Andresen’s idea. [They were] forced to comply with that demand because the attack was powerful enough to cause connectivity problems for some Slush Pool miners. “This is a destructive behavior,” says Vranova. “I would admire someone who stands out, explains, and promotes his idea. [But] this is just cowardly”…
Another victim was the Web hosting company ChunkHost, based in Los Angeles. It didn’t receive a message, but the attack was focused on one customer who had recently switched the software powering a Bitcoin ATM to BitcoinXT. “It seemed pretty clear. As soon as he switched, he got attacked,” says Josh Jones, a founder of ChunkHost.
Others running BitcoinXT reported the same thing. One user wrote on the forums:
Ripple Effects
The decision to censor all discussion of BitcoinXT did not just infuriate regular Bitcoiners. It also upset fellow moderators. A few days after Theymos’ announcement, a dissident moderator “jratcliff63367” wrote a sharply critical article entitled, “Confessions of an r/Bitcoin moderator.” One section reads:
When theymos decided to use his centralized authority of r/bitcoin to stifle all debate and discussion of bitcoin-xt, he violated a core principle. As a decentralized peer-to-peer network, any point of centralized control is problematic… This one single person holds absolute centralized control of the two largest communications platforms for the community to discuss the future and evolution of bitcoin...
He exercises absolute power of what is, or is not, allowed to be discussed; including complete and total censorship power over the narrative in the two largest media outlets.7
Only ten days after jratcliff63367’s public criticism of Theymos, he was removed as a moderator from r/Bitcoin. He would later speculate that his removal was because of suggesting that the Core developers might be compromised:
It is not at all unreasonable to suppose that core-devs have been contacted by the ‘spooks’ and are applying influence. Crippling bitcoin so that almost all of the value has to flow through side-channels and only large institutions can access the core network would be a great solution to what world governments consider as a major problem…
The government doesn’t actually care if there is some new ‘asset class’ like bitcoin. There are zillions of asset classes, what do they care if it is bitcoins or beanie babies? What they care about is people transferring that value without their ability to track and intercept. If the only people who can directly access the blockchain are big-banks...well you get the idea.8
The same heavy-handed censorship still exists today, and the amount of people caught within this information bubble is much larger. The impact of these controls cannot be overstated. The enormous confusion surrounding Bitcoin exists, in large part, because of the deliberate efforts of a handful of people to filter out all information that challenges their narrative—and, ultimately, challenges their power. Unfortunately, mass censorship and propaganda were not the only tactics used against BitcoinXT. More aggressive measures were taken, too.
The DDoS Attacks Begin
SlushPool was one of many mining pools in Bitcoin. A mining pool is the standard way for miners to regulate their income. Without a pool, individual miners must wait until they personally find a block in order to earn any Bitcoins. But with a pool, miners put their hashing power together and share the block rewards, smoothing out their income considerably. Virtually all miners are part of a pool. So, when SlushPool was hit with a DDoS attack after allowing voting on BIP101, it affected a lot of people. On August 25th, 2015, Slushpool received a letter from the perpetrators, telling them the attacks would continue until they stopped supporting BitcoinXT.9 According to the MIT Technology Review:
Alena Vranova… said the company received a message saying that the attack would end once it turned off the ability for customers to declare support for Andresen’s idea. [They were] forced to comply with that demand because the attack was powerful enough to cause connectivity problems for some Slush Pool miners. “This is a destructive behavior,” says Vranova. “I would admire someone who stands out, explains, and promotes his idea. [But] this is just cowardly”…
Another victim was the Web hosting company ChunkHost, based in Los Angeles. It didn’t receive a message, but the attack was focused on one customer who had recently switched the software powering a Bitcoin ATM to BitcoinXT. “It seemed pretty clear. As soon as he switched, he got attacked,” says Josh Jones, a founder of ChunkHost.
Others running BitcoinXT reported the same thing. One user wrote on the forums:
There’s a substantial difference between discussion of a proposed Bitcoin hardfork… and promoting software that is programmed to diverge into a competing network/currency. The latter is clearly against the established rules of r/Bitcoin, and while Bitcoin’s technology will continue working fine no matter what people do, even the attempt at splitting Bitcoin up like this will harm the Bitcoin ecosystem and economy.
Theymos further explains the decision in the form of a Q&A session:
Why is XT considered an altcoin even though it hasn’t broken away from Bitcoin yet?
Because it is intentionally programmed to diverge from Bitcoin, I don’t consider it to be important that XT is not distinct from Bitcoin quite yet…
Can I still talk about hard fork proposals on r/Bitcoin?
Right now, not unless you have something really new and substantial to say. After this sticky is removed, it will be OK to discuss any hardfork to Bitcoin, but not any software that hardforks without consensus, since that software is not Bitcoin.
How do you know that there is no consensus?
Consensus is a high bar. It is not the same as a majority. In general, consensus means that there is near-unanimity. In the very particular case of a hardfork, “consensus” means “there is no noticeable probability that the hardfork will cause the Bitcoin economy to split into two or more non-negligible pieces”.
I know almost for certain that there is no consensus to the change in XT because Bitcoin core developers Wladamir, Greg, and Pieter are opposed to it. That’s enough to block consensus…
But with such a high bar, 8 MB blocks will be impossible!
If consensus can never be reached on one particular hardfork proposal, then the hardfork should never occur. Just because you want something doesn’t mean that it’s ever reasonable for you to hijack Bitcoin from the people who don’t want it, even if your side is the majority (which it isn’t in this case). This isn’t some democratic country where you can always get your way with sufficient politicking. Get consensus, live without the change, or create your own altcoin…
Towards the end of his announcement, he added that it does not matter if everyone disagrees with him or despises the censorship:
If 90% of r/Bitcoin users find these policies to be intolerable, then I want these 90% of r/Bitcoin users to leave. Both r/Bitcoin and these people will be happier for it.5
The Bitcoin community was livid. Theymos’s announcement was another dark milestone in Bitcoin’s history, and it generated a huge reaction. The thread accumulated more than a thousand comments. A small sample of them provide the general tone of responses:
“[C]alling XT an altcoin is ridiculous, clinging to semantics at best. This topic deserves to be allowed to be hashed out, and banning further discussion of it is a gross disservice to the community.”
“Please change this sub to r/bitcoincore if that’s all that will be discussed here. Calling it r/bitcoin but banning discussions about alternative clients and consensus rules is misleading…”
Another user couldn’t help but be sarcastic about the situation:
Congrats r/bitcoin, I am glad you have finally settled on the Bitcoin CEO, now you have that central authority that you always wanted that will tell you exactly how you are supposed to think and act. No more having to think and decide for yourself, you have theymos to tell you exactly what is bitcoin, what the laws and rules are about bitcoin, what the devs think… So if you are ever unsure about bitcoin Theymos will from now on make all the decisions for you..
One user speculated that the moderators might have been compromised:
I think it’s worth discussing the possibility that the mod team has become compromised and banks (or whomever) could stand to make money controlling the discussion.
Theymos was not shy about his decision, and he revealed his censorship strategy in conversation that would eventually be leaked:
You must be naive if you think it’ll have no effect. I’ve moderated forums since long before Bitcoin (some quite large), and I know how moderation affects people. Long-term, banning XT from r/Bitcoin will hurt XT’s chances to hijack Bitcoin. There’s still a chance, but it’s smaller. (This is improved by the simultaneous action on bitcointalk.org, bitcoin.it, and bitcoin.org)… I do have power over certain centralized websites, which I’ve decided to use for the benefit of Bitcoin as a whole…6
Theymos further explains the decision in the form of a Q&A session:
Why is XT considered an altcoin even though it hasn’t broken away from Bitcoin yet?
Because it is intentionally programmed to diverge from Bitcoin, I don’t consider it to be important that XT is not distinct from Bitcoin quite yet…
Can I still talk about hard fork proposals on r/Bitcoin?
Right now, not unless you have something really new and substantial to say. After this sticky is removed, it will be OK to discuss any hardfork to Bitcoin, but not any software that hardforks without consensus, since that software is not Bitcoin.
How do you know that there is no consensus?
Consensus is a high bar. It is not the same as a majority. In general, consensus means that there is near-unanimity. In the very particular case of a hardfork, “consensus” means “there is no noticeable probability that the hardfork will cause the Bitcoin economy to split into two or more non-negligible pieces”.
I know almost for certain that there is no consensus to the change in XT because Bitcoin core developers Wladamir, Greg, and Pieter are opposed to it. That’s enough to block consensus…
But with such a high bar, 8 MB blocks will be impossible!
If consensus can never be reached on one particular hardfork proposal, then the hardfork should never occur. Just because you want something doesn’t mean that it’s ever reasonable for you to hijack Bitcoin from the people who don’t want it, even if your side is the majority (which it isn’t in this case). This isn’t some democratic country where you can always get your way with sufficient politicking. Get consensus, live without the change, or create your own altcoin…
Towards the end of his announcement, he added that it does not matter if everyone disagrees with him or despises the censorship:
If 90% of r/Bitcoin users find these policies to be intolerable, then I want these 90% of r/Bitcoin users to leave. Both r/Bitcoin and these people will be happier for it.5
The Bitcoin community was livid. Theymos’s announcement was another dark milestone in Bitcoin’s history, and it generated a huge reaction. The thread accumulated more than a thousand comments. A small sample of them provide the general tone of responses:
“[C]alling XT an altcoin is ridiculous, clinging to semantics at best. This topic deserves to be allowed to be hashed out, and banning further discussion of it is a gross disservice to the community.”
“Please change this sub to r/bitcoincore if that’s all that will be discussed here. Calling it r/bitcoin but banning discussions about alternative clients and consensus rules is misleading…”
Another user couldn’t help but be sarcastic about the situation:
Congrats r/bitcoin, I am glad you have finally settled on the Bitcoin CEO, now you have that central authority that you always wanted that will tell you exactly how you are supposed to think and act. No more having to think and decide for yourself, you have theymos to tell you exactly what is bitcoin, what the laws and rules are about bitcoin, what the devs think… So if you are ever unsure about bitcoin Theymos will from now on make all the decisions for you..
One user speculated that the moderators might have been compromised:
I think it’s worth discussing the possibility that the mod team has become compromised and banks (or whomever) could stand to make money controlling the discussion.
Theymos was not shy about his decision, and he revealed his censorship strategy in conversation that would eventually be leaked:
You must be naive if you think it’ll have no effect. I’ve moderated forums since long before Bitcoin (some quite large), and I know how moderation affects people. Long-term, banning XT from r/Bitcoin will hurt XT’s chances to hijack Bitcoin. There’s still a chance, but it’s smaller. (This is improved by the simultaneous action on bitcointalk.org, bitcoin.it, and bitcoin.org)… I do have power over certain centralized websites, which I’ve decided to use for the benefit of Bitcoin as a whole…6
Bitcoin.org used to be considered a neutral page for people learning about Bitcoin. It had basic introductory information, links to companies and services within the industry, and other resources that newcomers would find helpful. However, since it was controlled by hardcore Bitcoin Core supporters, this veneer of neutrality quickly evaporated once BitcoinXT started to threaten the dominance of the Core developers. On June 16th 2015, Bitcoin.org announced their official “Hard Fork Policy,” which read:
It appears that the recent block size debate will likely result in a contentious hard fork attempt… The danger of a contentious hard fork is potentially so significant that Bitcoin.org has decided to adopt a new policy:
Bitcoin.org will not promote any software or services that will leave the previous consensus because of a contentious hard fork attempt.
This policy applies to full node software, such as Bitcoin Core, software forks of Bitcoin Core, and alternative full node implementations. It also applies to wallets and services… which release code or make announcements indicating that that will cease operating on the side of the previous consensus…1
In other words, any companies siding with BitcoinXT over Core would have their listings removed from the site. Since Bitcoin.org was, and still is, often considered the “official” website for Bitcoin, this policy would help create the narrative that any “contentious forks” away from Core are illegitimate by default. The announcement was immediately blasted by many Bitcoiners, Mike Hearn among them saying:
You want to ensure new users don’t learn about Bitcoin XT. Why not just say that outright? Your position is wrong and will just reduce bitcoin.org’s utility as a place to learn important information. What’s more, you are inherently supporting a status quo in which a tiny number of people can veto any change to Bitcoin regardless of how widely supported it is by the rest of the community. That’s not decentralisation. And it is ultimately far more dangerous to Bitcoin.
If you try and shut down the only method the community has to reject the decisions of this tiny group, you’re effectively dooming the project to the whims of whoever happened to be around early on in the project and ended up with commit access.2
Hearn also noted the absurdity of the policy, given the enormous support for bigger blocks across the industry:
…it says you will delist any wallet or service that announces it will operate on the other side of the “previous consensus”. Currently every single wallet bar GreenAddress that we’ve polled has told us they support bigger blocks. Additionally, every major payment processor we’ve talked to has also said that. Plus the major exchanges. So to be consistent with this policy you will have to delete every wallet and all major services (except GreenAddress) from the website.
Fellow Bitcoiner Will Binns wrote:
Bitcoin.org should try to [stay] as non-biased as possible in the midst of publicly debated issues. Hundreds of people, if not thousands, are coming to this site every day, many of which are new users learning about Bitcoin for the first time. For existing users in the space, this website is also an incredible resource in most cases.
It seems like this post would be in an effort to sway public opinion more-so than anything else. It doesn’t provide a complete context nor link to a wider array of information about the underlying issues it references so the reader can form their own opinion - it comes across as forcing a biased one.3
This new Hard Fork Policy would not be the last time the Bitcoin.org website was used to mislead people into thinking that Bitcoin Core was the “official” software and that any competitors were illegitimate. Though, the impact of this particular policy was negligible compared to what happened to the online discussion forums.
Reddit Gets Captured
For months, it was common on the r/Bitcoin subreddit for users to complain about their posts being censored and removed from the platform. One of the most highly upvoted threads in the forum’s history called for the moderators to step down and be replaced.4 Shortly after this thread was posted it was removed, and the very next day in August 2015, Theymos announced a new moderation policy on r/Bitcoin that censored all discussion of BitcoinXT. The post is lengthy, but recommended reading, as it marked another milestone in Bitcoin’s history. The key message was that all hard forks are illegitimate without a “consensus” of Core developers. Because of this, BitcoinXT was not really Bitcoin and therefore could no longer be discussed on the platform. Excerpts from the announcement are provided below:
r/Bitcoin exists to serve Bitcoin. XT will, if/when its hardfork is activated, diverge from Bitcoin and create a separate network/currency. Therefore, it and services that support it should not be allowed on r/Bitcoin…
It appears that the recent block size debate will likely result in a contentious hard fork attempt… The danger of a contentious hard fork is potentially so significant that Bitcoin.org has decided to adopt a new policy:
Bitcoin.org will not promote any software or services that will leave the previous consensus because of a contentious hard fork attempt.
This policy applies to full node software, such as Bitcoin Core, software forks of Bitcoin Core, and alternative full node implementations. It also applies to wallets and services… which release code or make announcements indicating that that will cease operating on the side of the previous consensus…1
In other words, any companies siding with BitcoinXT over Core would have their listings removed from the site. Since Bitcoin.org was, and still is, often considered the “official” website for Bitcoin, this policy would help create the narrative that any “contentious forks” away from Core are illegitimate by default. The announcement was immediately blasted by many Bitcoiners, Mike Hearn among them saying:
You want to ensure new users don’t learn about Bitcoin XT. Why not just say that outright? Your position is wrong and will just reduce bitcoin.org’s utility as a place to learn important information. What’s more, you are inherently supporting a status quo in which a tiny number of people can veto any change to Bitcoin regardless of how widely supported it is by the rest of the community. That’s not decentralisation. And it is ultimately far more dangerous to Bitcoin.
If you try and shut down the only method the community has to reject the decisions of this tiny group, you’re effectively dooming the project to the whims of whoever happened to be around early on in the project and ended up with commit access.2
Hearn also noted the absurdity of the policy, given the enormous support for bigger blocks across the industry:
…it says you will delist any wallet or service that announces it will operate on the other side of the “previous consensus”. Currently every single wallet bar GreenAddress that we’ve polled has told us they support bigger blocks. Additionally, every major payment processor we’ve talked to has also said that. Plus the major exchanges. So to be consistent with this policy you will have to delete every wallet and all major services (except GreenAddress) from the website.
Fellow Bitcoiner Will Binns wrote:
Bitcoin.org should try to [stay] as non-biased as possible in the midst of publicly debated issues. Hundreds of people, if not thousands, are coming to this site every day, many of which are new users learning about Bitcoin for the first time. For existing users in the space, this website is also an incredible resource in most cases.
It seems like this post would be in an effort to sway public opinion more-so than anything else. It doesn’t provide a complete context nor link to a wider array of information about the underlying issues it references so the reader can form their own opinion - it comes across as forcing a biased one.3
This new Hard Fork Policy would not be the last time the Bitcoin.org website was used to mislead people into thinking that Bitcoin Core was the “official” software and that any competitors were illegitimate. Though, the impact of this particular policy was negligible compared to what happened to the online discussion forums.
Reddit Gets Captured
For months, it was common on the r/Bitcoin subreddit for users to complain about their posts being censored and removed from the platform. One of the most highly upvoted threads in the forum’s history called for the moderators to step down and be replaced.4 Shortly after this thread was posted it was removed, and the very next day in August 2015, Theymos announced a new moderation policy on r/Bitcoin that censored all discussion of BitcoinXT. The post is lengthy, but recommended reading, as it marked another milestone in Bitcoin’s history. The key message was that all hard forks are illegitimate without a “consensus” of Core developers. Because of this, BitcoinXT was not really Bitcoin and therefore could no longer be discussed on the platform. Excerpts from the announcement are provided below:
r/Bitcoin exists to serve Bitcoin. XT will, if/when its hardfork is activated, diverge from Bitcoin and create a separate network/currency. Therefore, it and services that support it should not be allowed on r/Bitcoin…
Why can this dispute not be resolved in some more civilised manner than an outright split? Put simply, the decision making process in Bitcoin Core has broken. In theory, like almost all open source projects, Core has a “maintainer”. The job of a maintainer is to shepherd the project and make decisions about what goes in and what doesn’t. The maintainer is the boss. A good maintainer gathers feedback, weighs arguments and then makes decisions. But in the case of Bitcoin Core the block size debate has been allowed to drag on for years.
The problem is that any change, no matter how obvious, can be nixed entirely if it becomes “controversial”, meaning another person with commit access objects. As there are five committers and many other non-committers who can also make changes “controversial” this is a recipe for deadlock. The fact that the block size was never meant to be permanent has ceased to matter: the fact that removing it is debated, is, by itself, enough to ensure it will not happen. Like a committee with no chairman, the meeting never ends…
After sharing a long list of key companies and individuals that were supportive of Hearn and Andresen, he then pointed out the enormous asymmetries of power between the Core developers and the rest of the entrepreneurs and engineers throughout the Bitcoin industry. No matter how much support a particular proposal received, it could be rejected by a handful of people with veto power:
Companies represent many of Bitcoin’s most passionate, devoted and technical people. They provide critical infrastructure. Yet the views of the people who build them are considered “misleading to the sense of consensus”. What about wallet developers? They are the people most exposed to the needs of day to day users. Never asked. When they spoke up anyway, it made no difference; their views are considered irrelevant…
It’s become clearer and clearer that the “consensus” that’s so often talked about in the Bitcoin Core community really means the views of a tiny handful of people, regardless of what anyone else in the wider community might think, how much work they have done, or how many users their products have.
Put another way, “developer consensus” is marketing, wool pulled over the eyes of Bitcoin users to blind them from the truth: just two or three people acting in concert can break Bitcoin in whatever way they see fit.
Hearn ended his article by illustrating that forks are the only way to prevent development capture, as they provide competitive pressure to keep developers from going rogue:
In short, they believe that the only mechanism that Bitcoin has to keep them in check should never be used. I don’t think they really mean it to come across this way, but it does. Their view is that there shouldn’t be any alternative to their decisions. That anything they object to, for whatever reason, is killed forever … and that Bitcoin is thus their toy to do with as they please.
This state of affairs cannot go on. The Bitcoin Core project has shown it cannot reform and so it must be abandoned. That is why Bitcoin has forked. We hope everyone understands.
Once again, nobody summed up the situation more accurately than Mike Hearn. His article was considered a brilliant articulation of the problems within Bitcoin, as well as a justification for forking off from Bitcoin Core. To small-blockers, however, it was considered an act of war. If a supermajority of miners followed Hearn and Andresen, the small-block vision of Bitcoin would be relegated to an altcoin, and the Core developers would effectively be fired. So, there was an immediate, widespread campaign to shut down XT before it gained too much momentum.
16
Blocking the Exit
Bitcoin looks the most decentralized when observed from a distance. Upon closer examination, it becomes clear that there are a small number of critical positions that have overwhelming influence over the network. Control over the software keys has already been established as one example. Another is the control of information flows online. BTC’s powerful narrative, repeated everywhere in the media, did not spontaneously emerge, nor was it the result of free and open discussion among Bitcoin enthusiasts. The two most important discussion platforms, on which the overwhelming majority of conversations happened, were bitcointalk.org and the r/Bitcoin subreddit, both of which still enjoy immense popularity. Both platforms happen to be controlled by the same person, known by the pseudonym “Theymos.” He also owns The Bitcoin Wiki (Bitcoin.it). That’s one person with enormous power to shape narratives and direct the flow of information, and when the time came, he was not hesitant to exercise this power.
The Censorship Begins
The problem is that any change, no matter how obvious, can be nixed entirely if it becomes “controversial”, meaning another person with commit access objects. As there are five committers and many other non-committers who can also make changes “controversial” this is a recipe for deadlock. The fact that the block size was never meant to be permanent has ceased to matter: the fact that removing it is debated, is, by itself, enough to ensure it will not happen. Like a committee with no chairman, the meeting never ends…
After sharing a long list of key companies and individuals that were supportive of Hearn and Andresen, he then pointed out the enormous asymmetries of power between the Core developers and the rest of the entrepreneurs and engineers throughout the Bitcoin industry. No matter how much support a particular proposal received, it could be rejected by a handful of people with veto power:
Companies represent many of Bitcoin’s most passionate, devoted and technical people. They provide critical infrastructure. Yet the views of the people who build them are considered “misleading to the sense of consensus”. What about wallet developers? They are the people most exposed to the needs of day to day users. Never asked. When they spoke up anyway, it made no difference; their views are considered irrelevant…
It’s become clearer and clearer that the “consensus” that’s so often talked about in the Bitcoin Core community really means the views of a tiny handful of people, regardless of what anyone else in the wider community might think, how much work they have done, or how many users their products have.
Put another way, “developer consensus” is marketing, wool pulled over the eyes of Bitcoin users to blind them from the truth: just two or three people acting in concert can break Bitcoin in whatever way they see fit.
Hearn ended his article by illustrating that forks are the only way to prevent development capture, as they provide competitive pressure to keep developers from going rogue:
In short, they believe that the only mechanism that Bitcoin has to keep them in check should never be used. I don’t think they really mean it to come across this way, but it does. Their view is that there shouldn’t be any alternative to their decisions. That anything they object to, for whatever reason, is killed forever … and that Bitcoin is thus their toy to do with as they please.
This state of affairs cannot go on. The Bitcoin Core project has shown it cannot reform and so it must be abandoned. That is why Bitcoin has forked. We hope everyone understands.
Once again, nobody summed up the situation more accurately than Mike Hearn. His article was considered a brilliant articulation of the problems within Bitcoin, as well as a justification for forking off from Bitcoin Core. To small-blockers, however, it was considered an act of war. If a supermajority of miners followed Hearn and Andresen, the small-block vision of Bitcoin would be relegated to an altcoin, and the Core developers would effectively be fired. So, there was an immediate, widespread campaign to shut down XT before it gained too much momentum.
16
Blocking the Exit
Bitcoin looks the most decentralized when observed from a distance. Upon closer examination, it becomes clear that there are a small number of critical positions that have overwhelming influence over the network. Control over the software keys has already been established as one example. Another is the control of information flows online. BTC’s powerful narrative, repeated everywhere in the media, did not spontaneously emerge, nor was it the result of free and open discussion among Bitcoin enthusiasts. The two most important discussion platforms, on which the overwhelming majority of conversations happened, were bitcointalk.org and the r/Bitcoin subreddit, both of which still enjoy immense popularity. Both platforms happen to be controlled by the same person, known by the pseudonym “Theymos.” He also owns The Bitcoin Wiki (Bitcoin.it). That’s one person with enormous power to shape narratives and direct the flow of information, and when the time came, he was not hesitant to exercise this power.
The Censorship Begins
The history of BitcoinXT would permanently disprove the idea that Bitcoin is somehow beyond the reach of human influence. Instead, it is deeply social, and its history is not shaped by software code writing itself—it’s shaped by individuals making difficult decisions in a social, economic, and political context. Though nearly every serious businessperson was supportive of a blocksize increase, some thought that firing Core outright would be too divisive. Instead, they would publicly support BIP101 and urge Bitcoin Core to merge it into their software. Several of the largest non-mining Bitcoin companies issued a joint statement endorsing BIP101 and 8MB blocks without explicitly endorsing BitcoinXT. Signatures included Stephen Pair, the CEO of Bitpay, Peter Smith, the CEO of Blockchain.info, Jeremy Allaire, the CEO of Circle.com, Wences Casares, the CEO of Xapo.com, Mike Belshe, the CEO of Bitgo.com, among others. The statement read:
Our community stands at a crossroads… After lengthy conversations with core developers, miners, our own technical teams, and other industry participants, we believe it is imperative that we plan for success by raising the maximum block size.
We support the implementation of BIP101. We have found Gavin’s arguments on both the need for larger blocks and the feasibility of their implementation — while safeguarding Bitcoin’s decentralization to be convincing. BIP101 and 8MB blocks are already supported by a majority of the miners and we feel it is time for the industry to unite behind this proposal.
Our companies will be ready for larger blocks by December 2015 and we will run code that supports this… We pledge to support BIP101 in our software and systems by December 2015, and we encourage others to join us.6
BitcoinXT is the unspoken part of this letter. “We will run code that supports BIP101 in December” translates to, “If Bitcoin Core does not allow this upgrade, we will switch to XT.”
Some of the biggest miners at the time released a similar statement. In it, they not only expressed their support for larger blocks, they specifically refuted one argument that Bitcoin Core had been promoting—that 8MB would be too large for Chinese miners who were stuck behind the famous “Great Firewall of China.” Core had previously argued that 8MB would cause bandwidth and latency issues. But several large Chinese mining companies—representing more than 60% of Bitcoin’s total hashrate7—signed a letter stating they were ready for 8MB blocks.
Figure 5: Industry letter signed by Chinese miners
One translated section reads:
If the current network is incapable of supporting blocks larger than 1MB, then Core’s insistence on the block size limit is understandable. But actually, even with the Great Firewall in place, Chinese mining pools have all said they want an 8MB block size.8
With the widespread international agreement that the blocksize limit must be raised, the power and influence of Bitcoin Core looked like it was coming to an end.
Time to Fork Off
On August 15th 2015, Mike Hearn wrote another landmark article in Bitcoin’s history entitled “Why is Bitcoin Forking?” that explained why a split had to happen.9 The entire article is worth reading, and several excerpts are quoted here:
So this is it. Here we are. The community is divided and Bitcoin is forking: both the software and, perhaps, the block chain too. The two sides of the split are Bitcoin Core and a slight variant of the same program, called Bitcoin XT… Such a fork has never happened before. I want to explain things from the perspective of the Bitcoin XT developers: let it not be said there was insufficient communication…
Satoshi’s plan brought us all together… It’s the idea of ordinary people paying each other via a block chain that created and united this global community. That’s the vision I signed up for. That’s the vision Gavin Andresen signed up for. That’s the vision so many developers and startup founders and evangelists and users around the world signed up for. That vision is now in jeopardy.
In recent months it’s become clear that a small group of people have a radically different plan for Bitcoin… They see a golden, one-time opportunity to forcibly divert Bitcoin from its intended path and onto a wildly different technical trajectory.
He then explained that, given the enormous difference between the competing visions, the most sensible resolution would for small blockers to create their own alternative coin rather than hijack Bitcoin by exploiting what he called a “temporary kludge”—i.e. the blocksize limit. However, it was clear that the small block faction would not leave to create their own independent project, nor would they compromise by even slightly increasing the limit. Hearn saw this as evidence of structural flaws within Bitcoin Core:
Our community stands at a crossroads… After lengthy conversations with core developers, miners, our own technical teams, and other industry participants, we believe it is imperative that we plan for success by raising the maximum block size.
We support the implementation of BIP101. We have found Gavin’s arguments on both the need for larger blocks and the feasibility of their implementation — while safeguarding Bitcoin’s decentralization to be convincing. BIP101 and 8MB blocks are already supported by a majority of the miners and we feel it is time for the industry to unite behind this proposal.
Our companies will be ready for larger blocks by December 2015 and we will run code that supports this… We pledge to support BIP101 in our software and systems by December 2015, and we encourage others to join us.6
BitcoinXT is the unspoken part of this letter. “We will run code that supports BIP101 in December” translates to, “If Bitcoin Core does not allow this upgrade, we will switch to XT.”
Some of the biggest miners at the time released a similar statement. In it, they not only expressed their support for larger blocks, they specifically refuted one argument that Bitcoin Core had been promoting—that 8MB would be too large for Chinese miners who were stuck behind the famous “Great Firewall of China.” Core had previously argued that 8MB would cause bandwidth and latency issues. But several large Chinese mining companies—representing more than 60% of Bitcoin’s total hashrate7—signed a letter stating they were ready for 8MB blocks.
Figure 5: Industry letter signed by Chinese miners
One translated section reads:
If the current network is incapable of supporting blocks larger than 1MB, then Core’s insistence on the block size limit is understandable. But actually, even with the Great Firewall in place, Chinese mining pools have all said they want an 8MB block size.8
With the widespread international agreement that the blocksize limit must be raised, the power and influence of Bitcoin Core looked like it was coming to an end.
Time to Fork Off
On August 15th 2015, Mike Hearn wrote another landmark article in Bitcoin’s history entitled “Why is Bitcoin Forking?” that explained why a split had to happen.9 The entire article is worth reading, and several excerpts are quoted here:
So this is it. Here we are. The community is divided and Bitcoin is forking: both the software and, perhaps, the block chain too. The two sides of the split are Bitcoin Core and a slight variant of the same program, called Bitcoin XT… Such a fork has never happened before. I want to explain things from the perspective of the Bitcoin XT developers: let it not be said there was insufficient communication…
Satoshi’s plan brought us all together… It’s the idea of ordinary people paying each other via a block chain that created and united this global community. That’s the vision I signed up for. That’s the vision Gavin Andresen signed up for. That’s the vision so many developers and startup founders and evangelists and users around the world signed up for. That vision is now in jeopardy.
In recent months it’s become clear that a small group of people have a radically different plan for Bitcoin… They see a golden, one-time opportunity to forcibly divert Bitcoin from its intended path and onto a wildly different technical trajectory.
He then explained that, given the enormous difference between the competing visions, the most sensible resolution would for small blockers to create their own alternative coin rather than hijack Bitcoin by exploiting what he called a “temporary kludge”—i.e. the blocksize limit. However, it was clear that the small block faction would not leave to create their own independent project, nor would they compromise by even slightly increasing the limit. Hearn saw this as evidence of structural flaws within Bitcoin Core:
The risk of a community fracture had to be compared to the risk of a network failure. If blocks became full, fees skyrocketed, and the network could not handle the transaction load—an unprecedented event at the time—the user experience would become torturous and unreliable, and it could permanently turn people off from Bitcoin. In 2015, the technology had still not become mainstream yet, and lots of people from the financial world were eager to see it fail. So, the blocksize limit had to be raised to avoid a crisis; the Core developers had to be fired, but the industry needed to wait until the right moment. In hindsight, now that we’ve seen multiple cases of network failure on BTC, it’s clear that the public can tolerate it—though perhaps because they have accepted the Core narrative and do not know better. Sky-high fees are certainly bad for BTC, but so far, they have not permanently destroyed its credibility.
Within Bitcoin development, there was a formal way to propose new changes to the software. Programmers would write “Bitcoin Improvement Proposals,” otherwise known as “BIPs.” BIPs ranged from trivial improvements to substantial changes. After a BIP was created, if there was any disagreement, a debate would ensue to figure out whether the proposal should be accepted or rejected. Various BIPs had previously been created to allow for blocksize increases. Some were modest increases; others were radical increases. None were accepted into Bitcoin Core.
Mike Hearn and others would create BIP101, proposing an immediate increase of the blocksize limit to 8mb, followed by tiny increases every block, resulting in a doubling of the limit every two years up to a new maximum size of 8GB by 2035—allowing for approximating 40,000 transactions per second (which was several times larger than Visa’s throughput at the time). Hearn would later reflect on the proposal:
In August 2015 it became clear that due to severe mismanagement, the “Bitcoin Core” project that maintains the program that runs the peer-to-peer network wasn’t going to release a version that raised the block size limit… So some long-term developers (including me) got together and developed the necessary code to raise the limit. That code was called BIP 101 and we released it in a modified version of the software that we branded Bitcoin XT. By running XT, miners could cast a vote for changing the limit. Once 75% of blocks were voting for the change the rules would be adjusted and bigger blocks would be allowed.4
The upgrade mechanism was simple and straightforward. Miners running BitcoinXT could cast a vote, and if a supermajority of the hashrate voted in favor of BIP101, then it would be activated after a two-week grace period. BIP101 was considered a “hard fork” upgrade because it would be incompatible with previous versions of the software—as opposed to a “soft fork” which maintains compatibility. Because of the way Satoshi hastily added the blocksize limit, it would take a hard fork to increase it. The Core developers would make loud protestations at the notion of a hard fork, claiming it could cause a network failure or split. In fact, many of them claimed it would be less risky to change the entire economics of Bitcoin than to have a hard fork. Pieter Wuille from Bitcoin Core stated:
If we are willing to go through the risk of a hard fork because of a fear of change of economics, then I believe [the Bitcoin] community is not ready to deal with change at all.5
In hindsight, the drama surrounding hard forks looks overblown. Nearly every cryptocurrency project undergoes hard forks, because they are an essential mechanism for upgrading critical code, fixing bugs, and reducing technical baggage. Ethereum regularly undergoes hard forks. Bitcoin Cash has undergone several since its release. But back in 2015, this precedent was not yet established, and Core was able to stoke fears that a hard fork could break the network. In reality, even if there was a software bug in the upgrade and the network was disrupted, it would simply be fixed, as other critical bugs have been in the past. The risks of disruption are negligible compared to the risks of overhauling the entire system—akin to taking chemotherapy to protect yourself from a common cold!
In my opinion, the real reason for the fear surrounding BIP101 was because it would have resulted in Bitcoin Core losing control over development and no longer holding the keys to the code repository online. Since XT would add BIP101, and Core would not, the two implementations would become incompatible with each other on the protocol level, resulting in the minority implementation being “forked off” the main network. Though this would be devastating for Core and their supporters, by requiring 75% of miners to support the change, it would ensure minimal disruption for regular users. The remaining miners would either have to upgrade their software to allow for larger blocks or create their own separate blockchain.
Within Bitcoin development, there was a formal way to propose new changes to the software. Programmers would write “Bitcoin Improvement Proposals,” otherwise known as “BIPs.” BIPs ranged from trivial improvements to substantial changes. After a BIP was created, if there was any disagreement, a debate would ensue to figure out whether the proposal should be accepted or rejected. Various BIPs had previously been created to allow for blocksize increases. Some were modest increases; others were radical increases. None were accepted into Bitcoin Core.
Mike Hearn and others would create BIP101, proposing an immediate increase of the blocksize limit to 8mb, followed by tiny increases every block, resulting in a doubling of the limit every two years up to a new maximum size of 8GB by 2035—allowing for approximating 40,000 transactions per second (which was several times larger than Visa’s throughput at the time). Hearn would later reflect on the proposal:
In August 2015 it became clear that due to severe mismanagement, the “Bitcoin Core” project that maintains the program that runs the peer-to-peer network wasn’t going to release a version that raised the block size limit… So some long-term developers (including me) got together and developed the necessary code to raise the limit. That code was called BIP 101 and we released it in a modified version of the software that we branded Bitcoin XT. By running XT, miners could cast a vote for changing the limit. Once 75% of blocks were voting for the change the rules would be adjusted and bigger blocks would be allowed.4
The upgrade mechanism was simple and straightforward. Miners running BitcoinXT could cast a vote, and if a supermajority of the hashrate voted in favor of BIP101, then it would be activated after a two-week grace period. BIP101 was considered a “hard fork” upgrade because it would be incompatible with previous versions of the software—as opposed to a “soft fork” which maintains compatibility. Because of the way Satoshi hastily added the blocksize limit, it would take a hard fork to increase it. The Core developers would make loud protestations at the notion of a hard fork, claiming it could cause a network failure or split. In fact, many of them claimed it would be less risky to change the entire economics of Bitcoin than to have a hard fork. Pieter Wuille from Bitcoin Core stated:
If we are willing to go through the risk of a hard fork because of a fear of change of economics, then I believe [the Bitcoin] community is not ready to deal with change at all.5
In hindsight, the drama surrounding hard forks looks overblown. Nearly every cryptocurrency project undergoes hard forks, because they are an essential mechanism for upgrading critical code, fixing bugs, and reducing technical baggage. Ethereum regularly undergoes hard forks. Bitcoin Cash has undergone several since its release. But back in 2015, this precedent was not yet established, and Core was able to stoke fears that a hard fork could break the network. In reality, even if there was a software bug in the upgrade and the network was disrupted, it would simply be fixed, as other critical bugs have been in the past. The risks of disruption are negligible compared to the risks of overhauling the entire system—akin to taking chemotherapy to protect yourself from a common cold!
In my opinion, the real reason for the fear surrounding BIP101 was because it would have resulted in Bitcoin Core losing control over development and no longer holding the keys to the code repository online. Since XT would add BIP101, and Core would not, the two implementations would become incompatible with each other on the protocol level, resulting in the minority implementation being “forked off” the main network. Though this would be devastating for Core and their supporters, by requiring 75% of miners to support the change, it would ensure minimal disruption for regular users. The remaining miners would either have to upgrade their software to allow for larger blocks or create their own separate blockchain.
I think the maximum block size must be increased for the same reason the limit of 21 million coins must NEVER be increased: because people were told that the system would scale up to handle lots of transactions, just as they were told that there will only ever be 21 million bitcoins.17
Only a few months after this post was written, it became unmistakably clear that the Core developers were not going to raise the blocksize limit. If big-block Bitcoin was going to exist as Satoshi designed it, Hearn and Andresen would have to take matters into their own hands.
15
Fighting Back
Endless debates did not work. Bitcoin was not scaling, and small blockers were not interested in compromise. In May 2015, Core developer Matt Corallo wrote:
Personally, I’m rather strongly against any commitment to a block size increase in the near future. Long-term incentive compatibility requires that there be some fee pressure, and that blocks be relatively consistently full or very nearly full. What we see today are transactions enjoying next-block confirmations with nearly zero pressure to include any fee at all…1
So, later that year, it was resolved that the Core developers had to be routed around. A different software implementation would have to be created, and if a majority of hashpower switched to it, the network would successfully bypass Core altogether. Since the long-term goal was always to have competing implementations, the intransigence of Core provided a great reason to start the competition—a decision that would permanently change Bitcoin’s history.
BitcoinXT and BIP101
Mike Hearn and Gavin Andresen had previously created an alternative implementation called BitcoinXT to make some non-critical changes to the software. BitcoinXT was still compatible with Bitcoin Core—they both connected users to the same network—but it allowed Hearn to work on another project called Lighthouse, which was a crowdsourcing platform that used Bitcoin as its currency. To get Lighthouse to work correctly, he needed minor changes made to the Core software, but since that proved nearly impossible, he just decided to make his own implementation instead. It was this alternative implementation that was chosen to be the big-block replacement of Bitcoin Core. The blocksize limit would be increased on BitcoinXT, making it incompatible with Core, and if a critical mass of miners used it, the network would be successfully upgraded, at long last, to allow for larger blocks. Satoshi described this upgrade mechanism in the whitepaper, stating:
[P]roof-of-work also solves the problem of determining representation in majority decision making… Proof-of-work is essentially one-CPU-one-vote. The majority decision is represented by the longest chain, which has the greatest proof-of-work effort invested in it…
[Miners] vote with their CPU power, expressing their acceptance of valid blocks by working on extending them and rejecting invalid blocks by refusing to work on them. Any needed rules and incentives can be enforced with this consensus mechanism.2
Not only would BitcoinXT upgrade the network from a technical perspective, it would also end Bitcoin Core’s dominance over the source code, making XT the main repository online. The bad decision-makers and broken decision-making process within Core would no longer matter. A journalist for the New Yorker asked Andresen about this in an interview:
I asked Andresen whether, if XT were to achieve full acceptance, he would then include all the earlier Bitcoin core devs in the new XT team. He replied that “[XT] will have a different set of developers. Part of the reason for forking is to have a clear decision-making process for the software development.3
Readers who are sympathetic to the original vision might be thinking to themselves, “It’s about time!”, but keep in mind that the decision to route around Bitcoin Core was an extremely difficult one to make. Nearly the entire cryptocurrency world, at that time, was unified within one Bitcoin community and network. In my many conversations with Bitcoin entrepreneurs, the frustration at Core was almost universal, but the desire to keep the network together was even stronger. If the situation got messy, it could fracture the community and economy.
Keep it Together
Only a few months after this post was written, it became unmistakably clear that the Core developers were not going to raise the blocksize limit. If big-block Bitcoin was going to exist as Satoshi designed it, Hearn and Andresen would have to take matters into their own hands.
15
Fighting Back
Endless debates did not work. Bitcoin was not scaling, and small blockers were not interested in compromise. In May 2015, Core developer Matt Corallo wrote:
Personally, I’m rather strongly against any commitment to a block size increase in the near future. Long-term incentive compatibility requires that there be some fee pressure, and that blocks be relatively consistently full or very nearly full. What we see today are transactions enjoying next-block confirmations with nearly zero pressure to include any fee at all…1
So, later that year, it was resolved that the Core developers had to be routed around. A different software implementation would have to be created, and if a majority of hashpower switched to it, the network would successfully bypass Core altogether. Since the long-term goal was always to have competing implementations, the intransigence of Core provided a great reason to start the competition—a decision that would permanently change Bitcoin’s history.
BitcoinXT and BIP101
Mike Hearn and Gavin Andresen had previously created an alternative implementation called BitcoinXT to make some non-critical changes to the software. BitcoinXT was still compatible with Bitcoin Core—they both connected users to the same network—but it allowed Hearn to work on another project called Lighthouse, which was a crowdsourcing platform that used Bitcoin as its currency. To get Lighthouse to work correctly, he needed minor changes made to the Core software, but since that proved nearly impossible, he just decided to make his own implementation instead. It was this alternative implementation that was chosen to be the big-block replacement of Bitcoin Core. The blocksize limit would be increased on BitcoinXT, making it incompatible with Core, and if a critical mass of miners used it, the network would be successfully upgraded, at long last, to allow for larger blocks. Satoshi described this upgrade mechanism in the whitepaper, stating:
[P]roof-of-work also solves the problem of determining representation in majority decision making… Proof-of-work is essentially one-CPU-one-vote. The majority decision is represented by the longest chain, which has the greatest proof-of-work effort invested in it…
[Miners] vote with their CPU power, expressing their acceptance of valid blocks by working on extending them and rejecting invalid blocks by refusing to work on them. Any needed rules and incentives can be enforced with this consensus mechanism.2
Not only would BitcoinXT upgrade the network from a technical perspective, it would also end Bitcoin Core’s dominance over the source code, making XT the main repository online. The bad decision-makers and broken decision-making process within Core would no longer matter. A journalist for the New Yorker asked Andresen about this in an interview:
I asked Andresen whether, if XT were to achieve full acceptance, he would then include all the earlier Bitcoin core devs in the new XT team. He replied that “[XT] will have a different set of developers. Part of the reason for forking is to have a clear decision-making process for the software development.3
Readers who are sympathetic to the original vision might be thinking to themselves, “It’s about time!”, but keep in mind that the decision to route around Bitcoin Core was an extremely difficult one to make. Nearly the entire cryptocurrency world, at that time, was unified within one Bitcoin community and network. In my many conversations with Bitcoin entrepreneurs, the frustration at Core was almost universal, but the desire to keep the network together was even stronger. If the situation got messy, it could fracture the community and economy.
Keep it Together
Despite their words, their actions were stalling Bitcoin’s growth at a critical time, and eventually, their small-block philosophy became even more radical. Bitcoiners everywhere were becoming impatient by 2013, louder by 2014, and were completely fed up in 2015. Nobody captured this sentiment better than Mike Hearn, in a public email thread with Greg Maxwell. Hearn started the email by quoting Maxwell, who was trying to argue that tiny blocks were always the plan from the beginning:
“It was well... understood that the users of Bitcoin would wish to protect its decenteralization [sic] by limiting the size of the chain to keep it verifyable [sic] on small devices.”
No it wasn’t. That is something you invented yourself much later. “Small devices” isn’t even defined anywhere, so there can’t have been any such understanding. The actual understanding was the opposite… Please don’t attempt to bullshit me about what the plan was…
If Satoshi had said from the start, “Bitcoin cannot ever scale. So I intend it to be heavily limited and used only by a handful of people for rare transactions. I picked 1mb as an arbitrary limit to ensure it never gets popular.”
... then I’d have not bothered getting involved. I’d have said, huh, I don’t really feel like putting effort into a system that is intended to NOT be popular. And so would many other people…
He finished the email by suggesting Maxwell create his own altcoin rather than hijack and re-engineer Bitcoin to fit his personal preferences:
Look, it’s clear you have decided that the way Bitcoin was meant to evolve isn’t to your personal liking. That’s fine. Go make an alt coin where your founding documents state that it’s intended to always run on a 2015 Raspberry Pi, or whatever it is you mean by “small device”. Remove SPV capability from the protocol so everyone has to fully validate. Make sure that’s the understanding that everyone has from day one about what your alt coin is for.
Then when someone says, gee, it’d be nice if we had some more capacity, you or someone else can go point at the announcement emails and say “no, GregCoin is meant to always be verifiable on small devices, that’s our social contract and it’s written into the consensus rules for that reason”.
But your attempt to convert Bitcoin into that altcoin by exploiting a temporary hack is desperate, and deeply upsetting to many people. Not many quit their jobs and created companies to build products only for today’s tiny user base.15
Nobody put it better than Mike Hearn, then or now. Though he and Gavin Andresen shared a similar technical vision for Bitcoin, Hearn was clearly the more confrontational of the two. After seeing the failures of Bitcoin and what it’s turned into today, I think Hearn’s anger and frustration were justified, and he was certainly not alone.
“Our New Overlords”
Andreas Antonopoulos, who has since become a popular advocate for Bitcoin and cryptocurrencies, also expressed his frustration at the behavior of the Core developers—and Mr. Maxwell in particular—in the online forums, saying:
[Maxwell] has previously posted several misattributed quotes and then failed to retract them or apologize… Treat any quotes he posts with extreme suspicion, especially if they are selective, short, out-of-context and attempting to slander - ie, his usual schtick. He rationalizes his opinion as the only one that matters, [a] somehow “neutral” opinion that we’d all accept if we weren’t so dumb…
The only thing that mattered in this debate was the opinion of the 3-4 developers who did not want any process that… resulted in anything but what they had already decided. They twisted, turned and rationalized, but in the end did exactly what they intended from the beginning: censorship of particular opinions by exclusion and decree.
All hail our new overlords. They’re not just coders, they are press directors and OWN bitcoin. As they often say, if you don’t like it... fork.16
In late 2014, while Gavin Andresen was still working at the Bitcoin Foundation, he would write an article laying out a roadmap for scaling. After writing countless forum posts, blog posts, and email threads explaining why the blocksize limit needed to be raised, he concluded that it was finally time to move forward:
The next scaling problem that needs to be tackled is the hardcoded 1-megabyte block size limit that means the network can support only approximately 7-transactions-per-second… The intent has always been to raise that limit when transaction volume justified larger blocks…
“Because Satoshi Said So” isn’t a valid reason [by itself]. However, staying true to the original vision of Bitcoin is very important. That vision is what inspires people to invest their time, energy, and wealth in this new, risky technology.
“It was well... understood that the users of Bitcoin would wish to protect its decenteralization [sic] by limiting the size of the chain to keep it verifyable [sic] on small devices.”
No it wasn’t. That is something you invented yourself much later. “Small devices” isn’t even defined anywhere, so there can’t have been any such understanding. The actual understanding was the opposite… Please don’t attempt to bullshit me about what the plan was…
If Satoshi had said from the start, “Bitcoin cannot ever scale. So I intend it to be heavily limited and used only by a handful of people for rare transactions. I picked 1mb as an arbitrary limit to ensure it never gets popular.”
... then I’d have not bothered getting involved. I’d have said, huh, I don’t really feel like putting effort into a system that is intended to NOT be popular. And so would many other people…
He finished the email by suggesting Maxwell create his own altcoin rather than hijack and re-engineer Bitcoin to fit his personal preferences:
Look, it’s clear you have decided that the way Bitcoin was meant to evolve isn’t to your personal liking. That’s fine. Go make an alt coin where your founding documents state that it’s intended to always run on a 2015 Raspberry Pi, or whatever it is you mean by “small device”. Remove SPV capability from the protocol so everyone has to fully validate. Make sure that’s the understanding that everyone has from day one about what your alt coin is for.
Then when someone says, gee, it’d be nice if we had some more capacity, you or someone else can go point at the announcement emails and say “no, GregCoin is meant to always be verifiable on small devices, that’s our social contract and it’s written into the consensus rules for that reason”.
But your attempt to convert Bitcoin into that altcoin by exploiting a temporary hack is desperate, and deeply upsetting to many people. Not many quit their jobs and created companies to build products only for today’s tiny user base.15
Nobody put it better than Mike Hearn, then or now. Though he and Gavin Andresen shared a similar technical vision for Bitcoin, Hearn was clearly the more confrontational of the two. After seeing the failures of Bitcoin and what it’s turned into today, I think Hearn’s anger and frustration were justified, and he was certainly not alone.
“Our New Overlords”
Andreas Antonopoulos, who has since become a popular advocate for Bitcoin and cryptocurrencies, also expressed his frustration at the behavior of the Core developers—and Mr. Maxwell in particular—in the online forums, saying:
[Maxwell] has previously posted several misattributed quotes and then failed to retract them or apologize… Treat any quotes he posts with extreme suspicion, especially if they are selective, short, out-of-context and attempting to slander - ie, his usual schtick. He rationalizes his opinion as the only one that matters, [a] somehow “neutral” opinion that we’d all accept if we weren’t so dumb…
The only thing that mattered in this debate was the opinion of the 3-4 developers who did not want any process that… resulted in anything but what they had already decided. They twisted, turned and rationalized, but in the end did exactly what they intended from the beginning: censorship of particular opinions by exclusion and decree.
All hail our new overlords. They’re not just coders, they are press directors and OWN bitcoin. As they often say, if you don’t like it... fork.16
In late 2014, while Gavin Andresen was still working at the Bitcoin Foundation, he would write an article laying out a roadmap for scaling. After writing countless forum posts, blog posts, and email threads explaining why the blocksize limit needed to be raised, he concluded that it was finally time to move forward:
The next scaling problem that needs to be tackled is the hardcoded 1-megabyte block size limit that means the network can support only approximately 7-transactions-per-second… The intent has always been to raise that limit when transaction volume justified larger blocks…
“Because Satoshi Said So” isn’t a valid reason [by itself]. However, staying true to the original vision of Bitcoin is very important. That vision is what inspires people to invest their time, energy, and wealth in this new, risky technology.
By pushing people away from Bitcoin, the Core developers reinforced their position as a centralized power over the entire network. They could determine how much creative experimentation would be allowed. They could also determine which projects were possible or impossible depending on what features they added—which made any personal connections with the Core developers valuable. They also ended up setting the culture around Bitcoin’s development—which was often unnecessarily dramatic and hostile towards innovation. Regardless of whether they were permissive or strict, the important fact is that they had this influence in the first place.
The hostility of the Core developers towards creative usages of the blockchain is particularly ironic considering the popularity of the narrative that Bitcoin is “programmable money.” Revisiting the OP_RETURN feature less than a year later, Greg Maxwell would write:
I think OP_RETURN has shown itself to be seriously problematic; and we continue to have problems with people beleving [sic] that storing non-bitcoin related data in the chain… is an approved, correct, non-antisocial use of the system.10
In Maxwell’s vision, users are supposed to behave like members of a congregation, following a list of approved behaviors handed down by their superiors. This level of rigidity and control is not conducive to creativity, nor is it realistic for a network that, if allowed to scale, could comprise of billions of people. Individuals cannot be expected to know what the “approved” usage of a technology is; they will just use whatever functionality is helpful to them.
Entrepreneurs and creative professionals need assurance that the protocol they are building on will not suddenly break due to some developers changing their minds or deciding that a particular usage of the blockchain is unacceptable. In practice, the more constraints put on Bitcoin, the more users have been pushed to alternative systems that provide them with additional functionality. As Gavin Andresen speculated in 2014, this was perhaps an intended result:
There is a small minority of people who believe that it would be BETTER if transactions moved to fiat currency, an altcoin, or some more-centralized off-blockchain solution. I strongly disagree.11
Fortunately, when Bitcoin Cash was released, OP_RETURN was one of the first things upgraded and increased to 220 bytes. This additional space, when coupled with significantly bigger blocks, enables more creative usages of the blockchain than are feasible with BTC. Increased data usage is not a significant concern within the big-block philosophy, since regular users do not have to run their own nodes, and miners can easily discard this data. Everyone is encouraged to take advantage of this feature and find new uses for it, even if Greg Maxwell would not approve!
Low fees are also critical to the long-term success of programmable money. The attitude towards high fees has shifted today, but originally, even a five-cent transaction fee was considered laughably high. In a famous interview, Vitalik Buterin commented:
Right now, a Bitcoin transaction costs five cents, which is… fine right now, because PayPal’s fees are even stupider. But, you know, the internet of money should not cost five cents a transaction. [Laughter] It’s kind of absurd.12
Despite how high the fees are across the cryptocurrency industry, Buterin was right. It is kind of absurd and unnecessary to have fees of more than a cent for the vast majority of transactions. If the utility of programmable money is hampered by five cent fees, imagine how much it’s hampered by $50 fees. Stephen Pair of BitPay shared a similar opinion, commenting on Bitcoin’s competitiveness as a payment system: “A penny for an average on-chain transaction is probably too expensive to be competitive.”13 There’s no technical reason why that can’t be achieved. It already is on the Bitcoin Cash network.
A Core Loss of Faith
The controversy surrounding OP_RETURN and other minor features was nothing compared to the anger that resulted from the refusal to increase the blocksize limit—especially since key Core developers had previously agreed that raising the limit was necessary, even if they did not want it entirely removed. Pieter Wuille wrote in 2013:
I’m in favor of increasing the block size limit in a hard fork, but very much against removing the limit entirely… My suggestion would be a one-time increase to perhaps 10 MiB or 100 MiB blocks (to be debated), and after that an at-most slow exponential further growth.14
The hostility of the Core developers towards creative usages of the blockchain is particularly ironic considering the popularity of the narrative that Bitcoin is “programmable money.” Revisiting the OP_RETURN feature less than a year later, Greg Maxwell would write:
I think OP_RETURN has shown itself to be seriously problematic; and we continue to have problems with people beleving [sic] that storing non-bitcoin related data in the chain… is an approved, correct, non-antisocial use of the system.10
In Maxwell’s vision, users are supposed to behave like members of a congregation, following a list of approved behaviors handed down by their superiors. This level of rigidity and control is not conducive to creativity, nor is it realistic for a network that, if allowed to scale, could comprise of billions of people. Individuals cannot be expected to know what the “approved” usage of a technology is; they will just use whatever functionality is helpful to them.
Entrepreneurs and creative professionals need assurance that the protocol they are building on will not suddenly break due to some developers changing their minds or deciding that a particular usage of the blockchain is unacceptable. In practice, the more constraints put on Bitcoin, the more users have been pushed to alternative systems that provide them with additional functionality. As Gavin Andresen speculated in 2014, this was perhaps an intended result:
There is a small minority of people who believe that it would be BETTER if transactions moved to fiat currency, an altcoin, or some more-centralized off-blockchain solution. I strongly disagree.11
Fortunately, when Bitcoin Cash was released, OP_RETURN was one of the first things upgraded and increased to 220 bytes. This additional space, when coupled with significantly bigger blocks, enables more creative usages of the blockchain than are feasible with BTC. Increased data usage is not a significant concern within the big-block philosophy, since regular users do not have to run their own nodes, and miners can easily discard this data. Everyone is encouraged to take advantage of this feature and find new uses for it, even if Greg Maxwell would not approve!
Low fees are also critical to the long-term success of programmable money. The attitude towards high fees has shifted today, but originally, even a five-cent transaction fee was considered laughably high. In a famous interview, Vitalik Buterin commented:
Right now, a Bitcoin transaction costs five cents, which is… fine right now, because PayPal’s fees are even stupider. But, you know, the internet of money should not cost five cents a transaction. [Laughter] It’s kind of absurd.12
Despite how high the fees are across the cryptocurrency industry, Buterin was right. It is kind of absurd and unnecessary to have fees of more than a cent for the vast majority of transactions. If the utility of programmable money is hampered by five cent fees, imagine how much it’s hampered by $50 fees. Stephen Pair of BitPay shared a similar opinion, commenting on Bitcoin’s competitiveness as a payment system: “A penny for an average on-chain transaction is probably too expensive to be competitive.”13 There’s no technical reason why that can’t be achieved. It already is on the Bitcoin Cash network.
A Core Loss of Faith
The controversy surrounding OP_RETURN and other minor features was nothing compared to the anger that resulted from the refusal to increase the blocksize limit—especially since key Core developers had previously agreed that raising the limit was necessary, even if they did not want it entirely removed. Pieter Wuille wrote in 2013:
I’m in favor of increasing the block size limit in a hard fork, but very much against removing the limit entirely… My suggestion would be a one-time increase to perhaps 10 MiB or 100 MiB blocks (to be debated), and after that an at-most slow exponential further growth.14