Much has been made lately of the debate revolving around the Bitcoin block size. For the uninitiated, a block is found by the network approximately every ten minutes and contains in it a record of all (or most) of the transactions to have occurred over the network since the last block was found. Now this has been a mostly unchanged part of the Bitcoin protocol since it was first introduced in 2009. However, in the past year the network has seen a steady increase in the number of transactions occurring on the network. This has led to a technical problem where, in some instances, not all transactions that have occurred since the previous block can be included in the most recent block.
Now there are many differing opinions on how to go about dealing with issue. Some argue that the block size needs to be increased to accommodate the growing number of transactions. Meanwhile others believe that the block size should be left untouched, leaving the decision of which transactions to include in a block up to miners and market forces.
So how does this effect you, the casual Bitcoin user?
Well this whole debate could play out in a number of different ways. It may very well be that a consensus is reached and any ill fate is avoided. However, it could also be that some developers maintain an implementation of Bitcoin that adheres to one protocol, while another group of developers maintains another.
A Bitcoin Blockchain Fork (Hypothetical)
For instance let’s go with one hypothetical split. Let’s say that one group wants to maintain the current blocksize, we’ll call this group Bitcoin Standard. Meanwhile another group decides that now is the time to expand the block size, we’ll call them Bitcoin Big.
Well in this hypothetical situation, Bitcoin Standard is maintaining the traditional code used in Bitcoin applications, and they choose to maintain the current blocksize. Bitcoin Big disagrees with this decision so they fork the traditional code and create their own version with a larger blocksize. Now this might not seem all that bad, but consider that the two versions of the code now operate in a way that makes them incompatible.
The Bitcoin blockchain would then fork into two separate records. Every transaction that occurred before the fork would be present in both blockchains. However, any new transaction would only be made on the particular fork of the network that you made it on.
You may be able to see where things go from here.
Some miners may agree with Bitcoin Standard so they keep using that code and mining according to that protocol. Another group of miners though disagree, so they start mining on the Bitcoin Big fork. Similar splits could play out across the larger Bitcoin economy with some wallet providers preferring one fork over another. If a consensus is not reached between the two (or more) groups it could even play out that Bitcoin becomes forever split into two essentially different currencies sharing the same origin.
You Have A Say In All This
It is commonly thought that after developers, miners have the biggest say in what happens within the Bitcoin network. As an individual user you actually have some sway too. For instance, if you run a full node (or want to start), which fork of the blockchain you choose to run would help to strengthen that fork and solidify it’s place as the dominant blockchain. Additionally, which services you opt to use and what blockchain they follow could also sway the outcome of this whole issue.
Secure Your Private Keys!
One of the most important things you can do to ensure that you have a voice is to maintain your own private keys. If you do not then your decision in this whole matter may be made for you by the service you’re using.
Say that you were using a (hypothetical) service called Bill’s Bitcoin Wallet. Bill’s Bitcoin wallet is an online wallet that does not provide users with access to their private keys. In fact, Bill’s Bitcoin wallet simply stores a number of ‘Virtual Bitcoins’ in a database so your user account isn’t even linked to actual Bitcoin addresses. Now when this (still hypothetical) fork happens, Bill’s Bitcoin Wallet chooses to go with the Bitcoin Standard group. However, you might want to use your Bitcoin on the Bitcoin Big fork, but since you don’t have access to your private keys you’re SOL.
However, if you had been using a wallet or service that allows you to maintain control of your keys, you could then switch to whichever fork (or both forks if you’re into that sort of thing) to use your Bitcoin. That way you have an actual say in which fork(s) ultimately succeed and ensure that your Bitcoin aren’t subject to the decisions of the people over at Bill’s Bitcoin Wallet.
The Forkening Of 2013
If the blockchain is forked this wouldn’t be the first time it has happened. In 2013 a new version of the Bitcoin software was published that inadvertently caused a fork in the blockchain. Now at the time this was basically an accident. The Bitcoin community managed to come together and agree on one fork to maintain as the only fork going forward. While some miners temporarily ‘lost coins’ as they had been mining on another fork, they were compensated by others in the Bitcoin community.
What makes this time different is that the community is actually divided on which course of action to take. If a split were to occur, miners that mine on one blockchain and find blocks, automatically have incentive to continue on that blockchain. As more blocks are found the incentive to stay on that chain is further solidified and the possibility of reaching a consensus presumably declines.
The Greater Cryptoconomy
While this technical issue doesn’t necessarily affect all cryptocurrencies in the same way, the forking of the Bitcoin blockchain would likely have far-reaching effects across the greater cryptoconomy. Consider for instance that Bitcoin is the de facto base currency used to exchange most cryptocurrencies into fiat currency and vice versa. A split in the Bitcoin would also mean a split in the services that nearly all cryptocurrencies rely on to run exchanges, amongst a growing number of other services.
At this stage this is still mostly hypothetical as neither group has taken steps to depart from the current standard. This could change shortly as developers have started taking action towards which course of action they prefer. How things will actually play out is still anyone’s guess. It could be that a consensus is reached or Bitcoin could split into two or even more distinct currencies. Who knows, a split in the blockchain could even bring attention and energy back into Bitcoin and reignite public interest. It’s really anyone’s guess at this point. Either way, from one Bitcoin enthusiast to another, make sure you’ve taken steps to ensure your Bitcoin are protected either way.
The blockchain could fork so secure your private keys to make sure you have access to your Bitcoin regardless of which version ends up prevailing.
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