BitFury Group (Bitfury Holding B.V.), Bitcoin blockchain infrastructure provider and Bitcoin mining hardware maker, recently released a research report [PDF] into what the company believes an increase in the Bitcoin blockchain block size will do for the network. The Bitcoin blockchain is the distributed ledger that securely stores all transactions made with bitcoins on the network and over the past few months discussions have arisen in how the blockchain functions with regards to the volume of transactions.

One claim is that currently the blockchain will be unable to keep up with scaling with greater transactions and a proposed solution has been to increase the size of blocks (parts of the blockchain that contain transactions) from 1 MB to something larger–the concluding size or how to get there has been a point of contention.

The abstract of the BitFury block size report reflects this debate:

Plans of block size increase are a subject of a heated debate in the Bitcoin community. The subject has gained increasing attention since the beginning of 2015, when the size of blocks started to approach the current hard limit of one megabyte. We study arguments for and against block size increase, and we analyze existing proposals by influential Bitcoin developers to increase the block size limit.

BitFury weighs the pros and cons of a block size increase by listing the potential benefits and pitfalls of such an increase.

As for pros, BitFury’s report includes more transactions per second and faster confirmation times (currently confirmation times rest at around 10 minutes and that is unlikely to change); more transactions for blockchain-based technologies such as colored coins, NASDAQ’s securities tracking system, Factom’s facts-on-blockchain system, etc.; and lowering transaction fees.

As for cons BitFury notes that increasing the block size will require a hard fork of the Bitcoin Core client code, which could lead to disruption of the network; larger blocks would propagate more slowly, which increases the probability of a double-spend, an event where a person manages to spend the same bitcoins twice (something the Bitcoin network is designed to prevent); larger blocks means needing more powerful hardware to run a miner or a node on the network; and finally bigger blocks could even lead to higher transaction fees–in contravention to the previous thought.

Numerous solutions have been proposed in the form of BIPs (Bitcoin Implementation Proposals) and BitFury examines BIP 100, BIP 101, BIP 102, and Pieter Wuille’s proposal (no BIP), as well as Mike Hearn’s Bitcoin XT client. For a high-level to detail drill down of the proposals and debate see last week’s Bitcoin Weekly here at SIliconANGLE.

BitFury report concludes: BIP 100 is the way to go

The conclusion of the BitFury block size report comes to a non-controversial conclusion: “In order for the Bitcoin ecosystem to continue developing, the maximum block size needs to be increased.”

As a mining outfit, BitFury notes that one consequence of increasing the block size suddenly to 8 MB “could result in a substantial percentage of full nodes dropping from the network.” Thus this leads to BitFury to support Jeff Garzik’s BIP 100 and Pieter Wuille’s proposals–because both of these proposals would increase the block size slowly over time.

BitFury further addresses that BIP 100 includes a consensus voting mechanism that allows the community to decide the block size limit.

As a result, the BitFury report throws its support behind BIP 100 as “the most prudent choice to grow the block size limit in the near-to-intermediate term.”

Mike Hearn sounds disagreement with parts of the report

Hearn’s Bitcoin XT client has been a large part of the block size debate, thus why it is included in the BitFury report. However, Hearn felt that parts of the report did not accurately address elements of Bitcoin code and the nature of Bitcoin XT. As a result, Hearn went to Reddit to express his disagreements.

A summary of those disagreements includes that BitFury’s report claims that Bitcoin XT “is not subject to code reviews and does not have a formal verification process.” Hearn says this is not true and directs detractors to look at XT’s pull records on GitHub to see who has reviewed it and how changes are made. Also, he mentions that Bitcoin Core has the same testing and QA controls as Bitcoin XT.

The BitFury report claims that Bitcoin XT has a “significantly smaller than the team working on Bitcoin Core,” to which Hearn points out the contributors to Bitcoin XT and a pull request to show the variety of reviewers. Included in the pull request example is a post by Gavin Andresen, the chief scientist at the Bitcoin Foundation and member of MIT’s Digital Currency Initiative. Gavin Andresen is also co-developer for Bitcoin XT.

Hearn is best known for releasing Bitcoin XT with a hard-fork event built into the client that would push the Bitcoin block size debate forward if 75% of all nodes and miners were to be running his client on the network by January, 2016. A fork of the Bitcoin network would cause the remainder of miners and nodes that did not support the bigger blocks behind by orphaning their blocks, which could cause a massive disruption to the network.

Until the divergence date, Bitcoin XT would behave exactly like Bitcoin Core, so miners and nodes can implement it now in order to place their vote towards that potential 75%. This effect has generated a great deal of controversy in the Bitcoin community, again see last week’s Bitcoin Weekly for the details.

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