roundtable

Mining pools representing at least 70% of the bitcoin network's total hashing power and two of the largest bitcoin exchanges have announced they would not be supporting Bitcoin Classic or any other "contentious hard-fork".

The mining pools - Bitfury, BTCC, BW.com, F2Pool - said in a letter that they would not be supporting a move into a hard fork at this time, instead opting for a moderate block size increase.

In addition, those mining pools have joined together with Bitfinex, Genesis Mining, BitmainWarranty, BIT-X Exchange, LightningASIC, Spondoolies-Tech, Smartwallet, and litecoin creator Charlie Lee to form a Bitcoin Roundtable to safely implement changes to the protocol.

There has been an ongoing debate over the amount of transactions that can be handled in a single block of data (currently limited to 1MB) in order to scale the Bitcoin network for better commercial use. Bitcoin Classic recommends a straightforward doubling of the size of blocks from 1MB to 2MB.

A more moderate, interim suggestion is Segregated Witness, suggested by Dr Pieter Wuille of Blockstream, which compresses the transactions within blocks by removing the signatures from transactions. In the case of simple transactions, there would be about 90 bytes of transaction data plus 80 or so bytes of signature. Only the 90 bytes need squeeze into the one megabyte block instead of 170 bytes, so 47% more transaction data.

'Two incompatible blockchain versions'

The letter signed by the four big mining pools stated: "We see the need for a modest block size increase in order to move the Bitcoin project forward, but we would like to do it with minimal risk, taking the safest and most balanced route possible. SegWit is almost ready and we support its deployment as a step in scaling.

"We think any contentious hard-fork contains additional risks and potentially may result in two incompatible blockchain versions, if improperly implemented. To avoid potential losses for all bitcoin users, we need to minimise the risks. It is our firm belief that a contentious hard-fork right now would be extremely detrimental to the bitcoin ecosystem.

"In the next three weeks, we need the Bitcoin Core developers to work with us and clarify the roadmap with respect to a future hard-fork, which includes an increase of the block size. Currently, we are in discussions to determine the next best steps.

"We are as a matter of principle against unduly rushed or controversial hard-forks irrespective of the team proposing and we will not run such code on production systems nor mine any block from that hard-fork. We urge everyone to act rationally and hold off on making any decision to run a contentious hard-fork (Classic/XT or any other)."

There are fears among many people invested in $5.7bn (£3.9bn) bitcoin ecosystem that opting for a hard fork of the code base and adopting Bitcoin Classic could prove detrimental; it's uncharted territory, they say.

Often reported is the possibility that Bitcoin would split into two chains and users could lose bitcoins when this happens. A recent article on Forbes explored the potential for people to game a hard fork and double their coins, doing transactions using coins minted within different versions of the system, referred to as "tainting". This could be done within a window of only minutes, according to commentators on Reddit.

Currently, the Bitcoin Classic Beta 2 release is a test and not intended for mining. The project is being developed by Jonathan Toomim, Gavin Andresen, Ahmed Bodiwala, Jeff Garzik, and Peter Rizun.

* Correction: this article originally said all the firms in the Bitcoin Roundtable had signed the letter, when in fact was just the four mining pools.