The Schism Over Bitcoin Is How Bitcoin Is Supposed to Work
<i>&gt; “Bitcoin is not having a crisis. It’s having an election,” says Brian Armstrong, the CEO of Coinbase, a very well funded startup based in San Francisco. “The [prevailing] mental model for what’s going on is a split, a divide in the community. But the right model is an election.” ... Bitcoin is designed to operate as a democracy, and indeed, it’s deep into a major election. This is pretty much how things are supposed to work.</i><p>Is it? That&#x27;s really what this is all about.<p>Unlike a constitutional political system, Bitcoin has no explicit meta-rules that govern how to change its basic rules. On one side of the present &quot;civil war&quot; over the size of transaction blocks is a group that wants to make a minor technical change to the protocol to allow it to support a higher volume of transactions; and on the other side is a group that doesn&#x27;t want that to happen.<p>But these groups really represent two sides of a more substantial debate. One side is advocating for the first deliberate change to the protocol&#x27;s basic rules, and the other side is saying, no, you can&#x27;t do that. Michael Marquardt (aka theymos), who controls bitcoin.org, bitcointalk.org, and &#x2F;r&#x2F;Bitcoin, and who is a vehement proponent of the status quo, has made plain his position in this meta-debate: &quot;Bitcoin is not a democracy.&quot;<p>And that&#x27;s the position taken by several Core developers, who insist that the block-size is a &quot;technical issue&quot; over which users and stakeholders should have no say. Gregory Maxwell, a vocal Core developer on the status-quo side of the debate, and many others, object to changing the protocol in ways that could cause a fork in the blockchain, with clients following one set of rules going one way and clients following other rules going another. It&#x27;s an objection in principle as much as a practical concern: nobody should be coerced into submitting to a new set of rules by the risk of being separated from  the mainstream of the Bitcoin community, and that means we have to stick with the present rules. (Its exponents call this philosophy &quot;consensus&quot;.)<p>So it&#x27;s the newest setting for the oldest and most basic conundrum of politics: bad rules are bad, but so is changing the rules of the game halfway through. Artificially constrained blocks are driving up the cost of transacting in bitcoin and hampering the currency&#x27;s adoption; but rules are rules, say people like Maxwell and his colleagues at Blockstream, who have carefully arranged their lives and built their businesses on the assumption that the present rules will be the future rules. (Blockstream is a company that employs several Core developers and is building a mechanism for transacting in bitcoin off the blockchain, i.e., a mechanism for providing more transaction capacity to an artificially limited protocol.)<p>And Maxwell and his colleagues have a point. We are, after all, talking about the rules of a currency that was created in part to take away from central bankers, politicians, and the masses the ability to change the rules of the game halfway through. If the block-size limit can be changed, what&#x27;s to prevent people from changing more important rules, like the one that keeps bitcoin&#x27;s money supply from growing without bound?<p>Still, as the saying goes, rules are made to be broken—and the peasants do tend to revolt.<p><i>Edit: I edited my comment to properly attribute to Marquardt words that I mistakenly recalled coming from Maxwell. I also tried to clarify a couple of points.</i>