The Blocksize Wars and the Bitcoin Cash Fork (2017)

Between 2015 and 2017 the Bitcoin community fought over one number: how large a block should be. The argument was technical on its face, but it also touched on governance, trade-offs and who gets to change the rules. It ended with a chain split in August 2017 that produced Bitcoin Cash.

The origin of the limit

In 2010, Satoshi Nakamoto added a 1 megabyte cap on block size to the Bitcoin software, largely as an anti-spam measure. For the first few years, blocks were far smaller than the cap, so it made no practical difference. As adoption grew, blocks began to fill. By 2015, transactions were sometimes waiting for confirmation and fees were rising, and the cap became a central issue.

The two main positions

• Increase the limit. Supporters argued that larger blocks would allow more transactions at low fees, in line with the original vision of Bitcoin as a payment system. Prominent figures on this side included developers Gavin Andresen and Mike Hearn.
• Keep blocks small and scale in other ways. Others argued that bigger blocks raise the cost of running a full node, which could reduce the number of independent participants and weaken decentralisation. They favoured improving efficiency and adding layers on top of the base chain, such as the Lightning Network.

Both sides included capable engineers and sincere arguments. The dispute was not simply good against bad.

Attempts to settle it

Several proposals emerged. In 2015, Andresen and Hearn released Bitcoin XT, a modified client that would increase the limit; it received limited support. Bitcoin Classic and Bitcoin Unlimited followed. A meeting in Hong Kong in February 2016 produced a roadmap that was never fully carried out. Meanwhile developers proposed Segregated Witness, or SegWit, which restructured how transaction data is stored so that more transactions fit in each block, and also fixed the transaction malleability problem that had troubled exchanges.

Activation and the split

SegWit needed a certain level of support from miners to activate. For a long time it did not get enough. In 2017, a group of users promoted a user-activated soft fork, known as BIP 148, to force the issue, and a compromise proposal called SegWit2x combined SegWit with a later increase to 2 MB. At the same time, a group that wanted larger blocks without SegWit prepared their own chain.

Bitcoin Cash was created through a hard fork at block 478,558. Anyone holding bitcoin at that moment received an equivalent amount of Bitcoin Cash on the new chain, since both chains shared the same history up to that point. Exchanges had to decide how to handle the new coin and the risk of replay attacks, where a transaction on one chain could be rebroadcast on the other.

What came afterwards

Bitcoin Cash raised its block limit to 32 MB in 2018. That year, the Bitcoin Cash community itself split in November, producing Bitcoin Cash (the ABC lineage) and Bitcoin SV, backed by Craig Wright and Calvin Ayre. The chain split again, and the disputes spilled into legal claims and exchange delistings. This pattern, where disagreements lead to new chains, became a recurring feature of the sector.

On Bitcoin, SegWit adoption grew gradually, and the Lightning Network launched on the main network in 2018. Later, the Taproot upgrade activated in November 2021, adding privacy and flexibility features. SegWit replaced the old 1 MB size limit with a block weight limit, but no hard-fork increase followed, in line with the cautious approach of those who argued to keep it small.

Why the cost of a node mattered

A full node downloads and verifies every block. Larger blocks mean more bandwidth, storage and processing for anyone who wants to check the rules for themselves. Supporters of small blocks argued that if only large companies could afford to run nodes, ordinary users would have to trust them. Supporters of larger blocks answered that hardware and connections keep improving, and that fees and capacity limits would push users away first. Many hobbyists run nodes on a home computer or a rented server such as a VPS, and the trade-off between capacity and the ease of verifying the chain was exactly what the argument was about.

What the dispute showed

1. Decentralised governance is hard. No central body can decide, so change relies on rough consensus among developers, miners, businesses and users.
2. Forks are a tool, and a risk. A hard fork lets a group leave, but it can also divide a community and its resources.
3. Trade-offs are real. Capacity, fees, security and decentralisation pull against each other, and different projects pick different balances.

Not an easy verdict

People disagree about who was right. Supporters of Bitcoin Cash point to its low fees and its emphasis on everyday payments. Supporters of Bitcoin argue that preserving a small, secure base layer was the priority. Market data shows that Bitcoin kept far greater adoption and value, but that is not the same as proof about the best design, and this article does not claim to settle it.

A practical lesson for site owners

If you accept crypto, you will be asked which coins to support. Rather than tracking each fork yourself, a payment processor handles the choice of networks and confirmations. Zebra Hosting takes payment in more than 80 cryptocurrencies through Cryptomus, as described on our hosting page.