Although we would like to remain as neutral as we can, perhaps a short statement regarding Spendabit's position on the ongoing “Scaling Debate” would not be inappropriate.

Despite the fact some from our team have been involved in Bitcoin since relatively early, we do not feel we're in a position to comment on the technical merits of the various scaling proposals — except to the extent that we would err on the side of being conservative. In that regard, we suspect one of the larger threats to Bitcoin in the near-term is that of a contentious hard-fork; or, put another way, the biggest threat may be that we no longer have just one “Bitcoin” but that we end up with two or more “Bitcoins”.

Such a hard-fork would not only be problematic from a monetary and network-effect standpoint, but it would also likely lead to “branding” problems and general confusion amongst those that are not tuned into the world of Bitcoin on a day-to-day basis. (One need miss only a single day of /r/Bitcoin to be left in the dark on a new acronym being flung around left and right.)

We could add that, although we would much prefer a Bitcoin with really low fees and all “on-chain” transactions, it appears to be completely infeasible to have this at any significant scale; even if we were to kick the block-size up to something untenable (given current bandwidth, storage technology, etc.) like 100 megabytes, we still could not compete with the likes of even one major credit-card network (Visa). Therefore, it follows that regardless of whether any limit to the block-size is lifted now, we still need so-called “Layer Two” transaction mechanisms.

In closing, we would not be opposed to an activation of Segregated Witness (segwit) nor a small block-size increase — though at the same time we would very much like to see the “decentralization” of Bitcoin increase rather than decrease. On the other hand, while we do believe that higher transaction fees are a considerable threat to Bitcoin adoption in the short run, they may be a necessary ”growing pain“ as solutions for tier-2 (or off-chain) transactions are developed and deployed. In any case, we hope a contentious hard-fork will not result as we, the Bitcoin community, work to take Bitcoin to the next level.