TL;DR: Shakespeare once quipped, “Misery acquaints a man with strange bedfellows.” Nowhere is that truer in the cryptocurrency world at the moment than with Bitcoin Cash (BCH) and Bitcoin Core (BTC) supporters. Both agree the latest proposal by a prominent BTC developer, to limit its block size further through a soft fork, would have obvious results: higher transaction fees and slower confirmation times on the BTC chain, while essentially encouraging users to attempt utilizing its off-chain, second layer solution, Lightning Network.
Lightning Network, BTC Smaller Block Proposal Seems to Have Wide Support
“Consensus: Softfork to limit block weights to 600kWU between 2019 Aug 1 and 2019 Dec 31,” recently appeared on the Github of noted BTC developer Luke Dash, Jr. It’s a seemingly banal line, but its implications are profound.
Although Bitcoin transaction fees would rise with the reduction of block size, and the network would become more congested, supporters of this effort view such byproducts as generally positive, encouraging more people to use the Lightning Network.
Call it the Jack Dorsey Effect. Twitter’s droll, hooded, bearded public face has been on a media relations junket of late, giving extended podcast interviews, making appearances, and becoming ever-more active on the platform he founded. At each stop, Dorsey weaved into the conversation words like “Bitcoin” and “blockchain,” sure to get his questioners’ attention.
See How Well it Performs
It worked. The interviews have gone viral, creating news of their own apart from his obvious reasons for granting them in the first place. From those, Dorsey then tweeted about various aspects of bitcoin, and even participated in a coin roll exercise — enthusiasts sending small amounts of crypto around to show utility, etc.
Crypto celebrities such as Dorsey dutifully passed along their share, calling out yet another notable person in the space. The attention seemed to trigger more interest in the Lightning Network (LN), an off-chain, second layer scaling solution proposed years ago. All of Bitcoin Core (BTC) troubles were placed upon development of LN: scaling, low transaction fees, off-chain scaling, second layer, confirmation times, and decentralization.
Dash, Jr.’s primary worry of late has been centralization, a problem he and other BTC devs attribute to larger block sizes which in theory require more computing power to run a full node, assuming consumer computing power remains static. The theory continues, average users won’t be able to keep up with equipment needed, and so fewer will participate in the network, leaving a giant opening for those who can to gobble up more control. Luke, Jr.’s patch or solution “would enforce a very simple softfork, reducing #Bitcoin block sizes to ~300k between Aug 1 and Dec 31. It demonstrates how one can make a truly TEMPORARY softfork,” he tweeted.
Higher Fees, Slower Transaction Times
For BTC supporters, activation of what’s known as SegWit allows blocks to get as high as 2MB, which they claim has lowered fees and works as a compromise in the pursuit of greater decentralization while preventing another hard fork in the process. SegWit, however, hasn’t really caught on, and continues to lag in terms of adoption. But with more LN visibility from the likes of Dorsey, all that becomes moot — lowered blocks further create better decentralizing effects and move users over to LN for cheaper transaction fees.
Companies such as Blockstream would stand to benefit greatly in such a LN scenario (Dorsey owns Lightning Labs) and its cousin project, Liquid. BTC is meant to be digital gold, proponents stress, and so the notion of using crypto as a currency can be handed over to LN for the lower fees associated, while the higher blocks on the BTC chain would be handled through SegWit, helping to all but dry mining incentives ahead of the 2020 reward halving. The key, BTC devs note, is adoption which they presume will more than make up for temporary losses in the meantime.
Interestingly, both BCH and BTC camps agree Dash, Jr.’s proposal is a logical extension of core dev thinking, along with changing the current game theory model of BTC. His desire for a user activated soft fork (UASF) would test newer users about their tech knowledge and their commitment to BTC exclusivity. Bitcoin Cash, for example, already has 32MB blocks, its fees are near zero, and confirmation times are fast, but it does not have SegWit, Lightning Network, or other Blockstream products like Liquid.
BCH Low Fees, Faster Transactions, On-Chain Scaling is Boring Compared to All that BTC Tech
Limiting on-chain BTC transactions, BCH supporter Vinny Lingham approved, tweeting, “I totally agree and have been saying this for a while. 1mb is an arbitrary number and if Bitcoin is going to rely on L2 to scale, then it makes no sense to keep it at 1mb. Reducing it to 350k as per the research from @LukeDashjr is practical and can help move transactions to L2,” he explained.
Similar reactions came from prominent BCH developer Chris Pacia and even the @Bitcoin Twitter avatar. Schizophrenic anon account @Cobra noticed, “Something I find strange is that people that said Bitcoin isn’t meant for payments and is better as ‘digital gold’ now seem to be the ones most excited for Lightning, while people that were excited for payments use cases and low fees and micropayments despise Lightning?”
It’s difficult to predict how those new to cryptocurrency might find a solution like that of Dash, Jr.’s. No doubt some will be attracted to its settlement layer aspect, $100 transaction fee goals (as advocated by BTC devs), and adapting to Lightning Network and Liquid usage. New users just might love having all that snappy BTC technical choice over, for example, alternatives such as Bitcoin Cash which simply involves easily downloading a wallet and having fast, cheap, reliable on-chain transactions right now — boring by comparison.
CONTINUE THE SPICE and check out our piping hot VIDEOS. Our podcast, The CoinSpice Podcast, has amazing guests. Follow CoinSpice on Twitter. Join our Telegram feed to make sure you never miss a post. Drop some BCH at the merch shop — we’ve got some spicy shirts for men and women. Don’t forget to help spread the word about CoinSpice on social media.