The audience of a panel session on scaling Bitcoin at Consensus 2017 in New York were asked to make known their frustration over the scaling impasse, and also to vote for easier changes to the rules.
While the Bitcoin blocksize debate rumbles on, the awaited segregated witness modification, which would increase block capacity, has been successfully deployed on Litecoin, after some 75% of the network agreed to lock in the changes. So far, Bitcoin's core developers have required 90-95% compliance from the network before changes to the protocol can be made.
While there is a large amount of highly technical points to consider when making changes to something as big and as valuable as Bitcoin, these points have become politicised; some stakeholders stand to lose and some to gain depending on the course of action taken – and of course nobody can be in charge.
In addition, there has recently been a compromise proposal put forth by Digital Currency Group CEO Barry Silbert of a block size increase to two megabytes within 12 months, which fitted the occasion nicely and was on many people's lips.
The drive towards a User Activated Soft Fork (UASF) aims to deflect political decisions away from the miners and put these in the hands of users. In this case the Bitcoin economy – individual users, merchants, exchanges, wallet providers and other economic actors – activate the soft fork with the software they run.
On the panel were: Eric Lombrozo, the co-CEO and co-founder of Ciphrex; Andrew Lee, CEO, Purse; Bobby Lee, CEO, BTCC; Peter Rizun, secretary, Bitcoin Unlimited; and Stephen Pair, CEO, BitPay.
The discussion seemed to turn on Litecoin's successful deployment of SegWit with 75% backing by the network. Bobby Lee asked if this didn't signify it was time to re-deploy, by which he meant running a new version of the software that has a threshold of lower than 80% activation. This question was directed at Lombrozo, who was representing Bitcoin core development. "That would require a re-deployment," said Lee.
"That would require a redeployement, yes," answered Lombrozo.
Lee held Lombrozo's feet to the fire over this, invoking the audience. "Do people want that?" said Lee. "Raise your hands if you are willing to re-deploy. Litecoin just recently activated at 75% threshold, some people are saying Btcoin can activate at 80%, rather than much higher limits – who is supportive of that?"
This was met with a round of applause.
Lombrozo then said: "So some people are willing to go down to 51% – there has been lot of discussions going on – like how low should we go? The higher the hash rate that's required for the transition, the less likely we are going to have high orphan rates and there are certain issues, for instance with wallets, that are not fully validating, getting false confirmations and things like that. So the higher the hash rate, the safer it is in general for the entire network."
Lee pointed out that when litecoin activated and locked in at 75%, the rest of the network followed suit without incident. "After two weeks, it wasn't like only 75% was running and 25% forked off; it's not like that. Once the signal link happened when it locked in at 75%, everyone got in line and within two weeks it was 100% activation," he said.
Lombrozo agreed that 95% might be a little too high and that Bitcoin core developers might have been a little too conservative, but he detailed some important distinctions. He said: "I think for the non-controversial stuff, like for CheckLockTimeVerify [Allowing Bitcoin sent in a transaction to be time-locked and spendable at a specified date or until a certain number of blocks have been mined] it made sense because it was pretty clear that we were going to be able to get 95% of hash power to support it, and it just seemed safer.
"Obviously SegWit is a little bit more contentious and it's been politicised more. So it's a very different situation. Litecoin definitely was able to activate safely at 75%, but it's a much smaller network and it's much easier; the logistics are easier for the deployment.
"I think if we are able to co-ordinate this and get the message out and people will know it's going on in the user base and are very supportive of it, then 95% is too conservative."
Again, he warned about potential vulnerabilities to orphan blocks and how reorgs can affect people who have not run their nodes for some time and may not have upgraded, adding: "Once the soft fork actually activates, it's very much recommended that if you are running a full node you enforce the new rules as well.
"In the case of Litecoin I think it was pretty easy to get everyone on board because it's just a much smaller community and the communication network is not that huge; you can scale those communications at that level. Bitcoin has got to the level where scaling communications is much much harder – I'm not saying it's not possible, but there are logistical challenges.
"I think that maybe we can below 80%; I think 51% is too low. At least when it's a majority with a soft fork we do not risk a chain split, a permanent split; there could be a temporary split where it's just like a typical reorg that happens. But we are not going to get a permanent split."
At this point Bitcoin Unlimited's Rizun said: "You don't think UAS could result in a chain split?"
"It could result in a chain split," said Lombrozo, "but I think it's very unlikely to result in a permanent chain split as long as the markets are strongly supportive of that. If the markets are strongly in favour of a SegWit chain, we saw with Ethereum that hash power basically chases the price."
"I think the end story is that we really don't know," said Jameson Lopp of BitGo, who was moderating. He then asked the panel if we would likely be having the same debate a year on from now.
Lombrozo went first: "I would say scaling is not really a measure of how many transactions we can handle a second. It's really a measure of how the system will behave when we add more load to it.
"If you want to make the system really scalable you want to satisfy the needs of a lot of users; a lot of users really like to be able to validate their own transactions and that's the most valuable and interesting feature for them. The trick here is to make it so the validation costs are substantially lower than the cost of actually executing transactions and putting them in blocks and stuff like that.
"If we are able to create an incentive structure where people are for instance paid to generate proofs, short proofs, that their transactions are valid, with some better cryptography, maybe some payment channel technology like micropayments and stuff like that – then I think most users would be willing to have gigabyte blocks or whatever, as long as they were able to verify their own transactions.
"Right now I think the main point of contention is that a lot of users feel that there is some trade-offs and they are going to have to sacrifice something that may be dear to them in order to satisfy something else.
"I am optimistic we are going to be able to surmount these things – but it's not going to happen right away and I understand some businesses have bills to pay and they are struggling in some ways and I really want to help everyone try and find ways to solve this – but I will say, it will probably take another few years until we find a good solution to these things."
Andrew Lee added: "I am optimistic we will scale this year because we have to – fees are way too high at this point. And if there is one thing that Barry's proposal alludes to, there is almost unanimous consensus, at least within the industry, that we need to move past this impasse. Whether or not we repeat the debate in couple of years' time, that is down to what actually happens, but within the next year we will scale Bitcoin beyond where it is today."
Then Bobby Lee: "I am also optimistic. This year all of us are frustrated with the log jam; whether it's Barry Silbert's proposal or whatever happens in the next few months, I am optimistic we will find way to activate SegWit, and also find a way too scale on chain to a larger block size."
Rizun said he was very optimistic. "I think we will scale massively in the next decade and achieve my goal of a billion wallets. And I think the question of users being able to validate their own transactions is a good one and important one, and in my opinion users already can verify their own transactions using SBP technology.
"That will be highly scalable, no matter how big the bitcoin network grows, so that users will always be able to be their own bank and verify their transactions, even though they might not be verifying all of the other transactions in the network."
Pair concluded: "Our business is growing very well, transactions are higher than ever with many Fortune 500 companies, but we have got a platform issue though. That we have to address.
"Long term we need to be on one chain; we need one chain that's secure and liquid that has a liquid token and secure backbone. But for a while we might run two; two forks of Bitcoin until we see which one wins out."