The Block Size Wars

Between 2015 and 2017, Bitcoin nearly split permanently. The dispute was technical on the surface — a debate about block size. Underneath, it was about who controls Bitcoin.

The background: as Bitcoin’s popularity grew, the mempool began filling up during peak periods. Transactions slowed. Fees rose. The obvious fix seemed to be increasing the block size limit — allowing more transactions per block. Simple.

One faction — including several large mining companies, prominent developers, and major exchanges — argued for increasing the block size, potentially significantly. They called their proposed fork SegWit2x, promising larger blocks alongside the SegWit upgrade.

The opposing faction — Bitcoin Core developers and a significant portion of the user base — argued that larger blocks would increase the cost of running a node, concentrating node operation among large institutions and undermining decentralisation. They argued that second-layer solutions were the right path for scaling, not bigger blocks.

The big blockers had significant industry support and mining power. They announced SegWit2x as a fait accompli. Major companies signed the New York Agreement backing it.

And then the users said no.

Ordinary Bitcoin holders ran nodes enforcing the original rules. Exchanges and wallet providers, facing user pressure, declined to implement SegWit2x. The fork was cancelled months before activation.

The block size wars proved something the community had theorised but never tested at scale: that miners and companies cannot force rule changes on Bitcoin if the node-running user base rejects them. The users are the final authority.

It also produced Bitcoin Cash — the big-block chain that implemented its own fork. Bitcoin Cash has never achieved the adoption its proponents expected.

Tomorrow: what is SegWit — the upgrade that actually succeeded.

— The Daily Bit