Bitcoin blocks were limited to 1 MB. As usage grew in 2015, fees rose and a long debate began.
Two sides
- Big blockers argued that Bitcoin should scale on-chain by raising the limit, keeping fees low for everyday payments. Proposals included Bitcoin XT and Bitcoin Classic.
- Small blockers argued that bigger blocks make running a full node costlier, pushing verification toward large companies. They favoured SegWit and second layers such as Lightning.
The turning points
- Users pushed BIP 148, a "user-activated soft fork" that would reject blocks not signalling SegWit from 1 August 2017.
- Under pressure, miners signalled. SegWit activated at block 481,824 on 24 August 2017.
- Some big blockers left and created Bitcoin Cash on 1 August 2017.
- The "Segwit2x" plan for a 2 MB hard fork was suspended on 8 November 2017; its organisers wrote that "we have not built sufficient consensus".
The lesson
Large companies and miners agreed on a change – and still could not impose it, because users running nodes refused. The episode showed who ultimately sets Bitcoin's rules.