Recently Roger Ver and Jameson Lopp faced off on the Tom Woods Show regarding the question of Bitcoin versus ‘Bitcoin Cash’ (aka Bcash). We usually try to steer clear of the “politics” of Bitcoin, but some observations may be valuable without taking sides.

Regarding the Ver/Lopp Debate

Unfortunately I think Roger was the more skilled orator here, and I would probably have been swayed in his direction were I not fairly steeped in the goings-on of Bitcoin. It's also unfortunate that Roger and Jameson (in my view) failed to cut to the crux of the matter: How large can the block-size be before it becomes a problem?

Virtually everyone agrees the block-size needs to go up some amount at some time. The disagreement is about how much and how quickly.

Roger seems to think 100-megabyte blocks are no problem, but even if we accept that as a workable number (toward the high end of the spectrum), it's not enough to compete with even one major credit-card company — something I think most Bitcoiners would agree we eventually want to do. Just to compete with Visa we'd need a block-size of about 500 MB (according to my back-of-the-envelope calculation).

And that's just one credit-card network.

How Big Is Too Big?

I tend to err on the conservative side of this debate. And by “conservative” I don't mean “continuing to allow the block-size to grow” as Roger applies the term; I mean we should be conservative from a technology/scaling standpoint and err on the side that is least likely to lead to centralization.

Even at 100 MB blocks, it's unlikely consumer-grade PCs on typical home-Internet connections would be able to keep up with the chain, let alone start up as a fresh node. And that, I suspect, is where problems would really start (if not sooner); tyrannical states would have no trouble imposing their way on data-centers and server farms — and that's about all we'd be left with if your average user cannot run a node.

That said, I'm not certain larger blocks are fatal to the (modestly decentralized) Bitcoin we have today... I might have been comfortable with the “2x” (a la SegWit2x) increase that was being proposed, had there been broad support in the community.

The Problem With Bitcoin Cash

Now whether 8 megabytes is too much or not is open for debate, but that's not my main peeve with Bitcoin Cash. This is: the method and motive by which it was brought about.

Bcash is the result of a sort of “stroke of the pen” by the largest Bitcoin-mining firm, Bitmain. This fact, in addition to the rapidity with which the fork was commenced, alone are huge red flags. But as others have pointed out, there may be a less-than-benevolent motive at play.

I agree with Roger about many things — especially about the main goal of crypto-currency, that of separation of State and Money — but I tend to disagree with him on the path to scaling Bitcoin. I think it's unfortunate we have such division amongst people that agree about so much.

The Path Forward

Bitcoin is having growing pains; there's no two ways about it. Personally, I'm willing to be patient to see how “Layer 2” technologies shape up in the coming months. Looking out a bit further, I would hope a proposal that slowly-but-continually (conservatively) grows the block-size in line with anticipated technology improvements is eventually adopted.

Competition in the crypto-currency space isn't bad per se, but it also portends negatively for crypto-currency as a whole if the “go-to coin” changes every few years... That is, if “original Bitcoin” is ever overtaken by Bcash or another ‘coin’, we have both a marketing problem and a money (store of wealth) problem; any crypto-currency that's going to be a world-class asset will need to have a proven track record.

Bitcoin is going on ten years and probably needs another ten to contend with other “real” currencies, but if the top spot changes hands (to, say, Bcash or Ethereum), I would suggest it becomes a significant setback for crypto-currency as a whole.