Wednesday, September 28, 2022

Why Aren’t Chinese Miners Showing More Support for Scaling Options?

Why Aren’t Chinese Miners Showing More Support for Scaling Options?

Whose side are China’s Bitcoin miners on? It’s one of the scaling debate’s most puzzling questions. Whether users and investors like it or not, it’s miners who wield most of the power to decide. Yet so far, the mining industry hasn’t voted convincingly for either Bitcoin Unlimited, Bitcoin Core or the SegWit solution. What’s holding them back?

Also read: More Digital Currencies Activating SegWit as Bitcoin Remains in Deadlock

Bitsonline spoke to Jake Smith, a.k.a. “Beijing Bitcoins” at his office in China. Smith has worked as a consultant in the Chinese cryptocurrency world almost since the beginning, and is close to most of the major players.

Smith is also a regular visitor to Japan, where he also works with entrepreneur Roger Ver at With that kind of contact list, he’s well-positioned to offer an opinion on miners and their scaling preferences.

An ‘Abdication of Responsibility’

JS: We hear repeatedly that Bitcoin miners in China want larger transaction blocks, and also support SegWit. Yet the people who actually have the power to choose a solution aren’t jumping either way. Why is that?

Smith: I’ve spent a lot of time trying to figure out why it is that nearly all miners are adamant about the need to increase the block size limit, and many of them have agreed to support SegWit, yet they do not do more to influence the change they want to see happen. I think it’s an unfortunate abdication of responsibility on the part of the miners, because as much as the community wants to argue over which development team or specific proposal is the best, the decision is ultimately made by the miners.

The current impasse we are at could have been avoided if the miners had been more bold when this argument first became a topic of serious public discussion in 2015. Many people seem to have forgotten that the five largest Chinese mining pools at the time all signed a statement saying they wanted 8MB blocks (this was when the argument du jour was that miners couldn’t handle larger blocks behind the Chinese firewall).

JS: Is the Chinese firewall still a valid reason to choose one or the other?

Smith: The landscape has changed since then. All of the arguments that were commonly given for why the limit could not be raised have since been dispelled, and today the discussion is about if Bitcoin should scale on-chain or off-chain with things like Lightning Network. The focus of the debate is no longer the implications of increased resource burden on nodes and miners but now discuss whether the block size limit needs to be increased at all!

Miners Actually Like SegWit but Don’t Want to Capitulate

JS: Has the debate turned into something more political now?

Bitcoin mining facility in China

Smith: I see two main reasons why miners are not signalling for either a higher limit or for SegWit. One of the reasons is face-saving: members of Bitcoin Core did not deliver on incorporating the 2MB hard fork code that they promised in the Hong Kong roundtable agreement.

Many people point to various proposals that have been written but seem to have forgotten that the specific language of the agreement was that miners would run SegWit when code for a hard fork was released in a version of Bitcoin Core. That never happened.

I know of some large on-the-fence miners who actually really like SegWit but will not vote for it because doing so would mean capitulating and saying that it’s OK for people to fail to uphold their end of an agreement.

The other main reason is the (irrational) fear of hard forks. There has been so much propaganda and FUD spread over the last couple of years that now tons of people are convinced that a hard fork will be disastrous and result in network failure and a currency split, like what happened with Ethereum Classic.

It’s pretty apparent that this cannot happen in Bitcoin without a proof-of-work change for the minority chain to stay alive, but years of propaganda have had an impact on the public conscious and it’s been repeated so many times that many people think it must be true.

JS: In some cases it seems to be quite personal.

Smith: A lot of the blame for the current situation is being placed on the shoulders of people like Roger Ver, Jihan Wu, and the Bitcoin Unlimited team. But the only reason that any contention exists at all is the Bitcoin Core team’s failure to deliver features that there is significant market demand for.

People aren’t running Bitcoin Unlimited because they hate Core, they are running it because they think on-chain scaling is more critical to Bitcoin’s success than the specific developers of Bitcoin Core are.

Doesn’t Have to Be An Either/or Option

JS: Would voting for Bitcoin Unlimited and a hard fork even mean the end of Bitcoin Core? Or is that a misconception?

Smith: Raising the block size limit does not even stop Bitcoin Core from continuing to contribute to the Bitcoin project, so I’m not sure why it’s constantly framed as an either/or option. I have no problem with the idea of solving transaction malleability, but SegWit is frequently presented not as a free market choice but instead as “the one true way” to scale Bitcoin to more users.

The repeated insistence on pushing Y when much of the market wants X is what has caused the fractious split in our industry. Gavin Andresen recently pondered: “I’d like to know why Core won’t give their users the tools to express their opinion on consensus-level changes.” No one is suggesting making sweeping changes to the protocol without broad consensus (actually with UASF, they are), so I am completely at a loss for why Core refuses to provide the tools for users and miners to express their preferences on things.

Miners not voting for SegWit is not about spite for Bitcoin Core or saying they don’t want off-chain scaling, it’s about expressing demand for a much needed change that Bitcoin Core does not want to even provide the tools for.

Should miners choose a side in the scaling debate, or are they being prudent by waiting? Let’s hear your thoughts.

Images via Pixabay, BitcoinTalk

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