A Network Without a CEO
Bitcoin has no CEO. No board of directors. No headquarters. So when thousands of people disagree on how the network should work, who decides?
Between 2015 and 2017, Bitcoin faced its biggest crisis. The community split over a simple question: should blocks be bigger? The answer nearly tore the network apart. But it also proved something remarkable about how Bitcoin governs itself.
The Problem: Full Blocks
Every Bitcoin transaction gets recorded in a block on the blockchain. In 2010, Satoshi Nakamoto added a 1 MB limit to block size. It was a safety measure to prevent spam attacks on the young network.
By 2015, blocks were regularly hitting that limit. Transactions backed up. Fees rose. Bitcoin could process only about 7 transactions per second. Visa handles thousands.
Two camps formed with very different solutions.
Big Blockers vs. Small Blockers
Big blockers wanted to increase the block size limit. Their logic: bigger blocks hold more transactions, which means lower fees and faster confirmations. They proposed raising the limit to 2 MB, 8 MB, or even removing it entirely.
Key big blockers included Roger Ver, Jihan Wu (co-founder of mining giant Bitmain), Gavin Andresen, and Mike Hearn. They argued that Bitcoin needed to scale on-chain to become a global payment system.
Small blockers wanted to keep blocks small. Their argument: bigger blocks require more bandwidth, storage, and computing power to validate. This would make it harder for everyday people to run nodes. Fewer nodes means a more centralized network. And centralization defeats the entire purpose of Bitcoin.
Small blockers favored off-chain solutions like the Lightning Network to handle everyday payments while keeping the base layer decentralized.
The Battle
The conflict played out through competing software clients. Each proposed a different path forward.
Bitcoin XT launched in August 2015. Created by Mike Hearn and Gavin Andresen, it proposed increasing blocks to 8 MB. It attracted media attention but never gained enough support from miners. By early 2016, fewer than 30 nodes remained.
Bitcoin Classic appeared in February 2016 with a more modest proposal: just 2 MB. It briefly surpassed Bitcoin Core in node count but stalled within months.
Bitcoin Unlimited launched in January 2016 with the most radical idea. Miners could choose their own block size through “emergent consensus.” It gained nearly 50% miner support at its peak but never crossed the finish line.
Meanwhile, two private agreements tried to broker peace.
The Hong Kong Agreement (February 2016) promised SegWit plus a 2 MB hard fork. It fell apart.
The New York Agreement (May 2017) produced SegWit2x. It was backed by 58 companies representing about 80% of mining power. But it excluded most Bitcoin Core developers and individual users.
The Turning Point: Users Fight Back
In early 2017, a pseudonymous developer called Shaolinfry proposed BIP 148. It became known as the User Activated Soft Fork (UASF).
The idea was simple but powerful. Instead of waiting for miners to signal support for SegWit (Segregated Witness), regular node operators would enforce it themselves. Any block that didn’t signal for SegWit after August 1, 2017, would be rejected by UASF nodes.
This was a direct challenge to the assumption that miners control Bitcoin. Node operators were saying: we set the rules, you follow them, or your blocks are worthless.
The movement spread. Users changed their social media avatars to UASF hats. Node operators upgraded their software. The message was clear: the economic majority — users, exchanges, and businesses running full nodes — would enforce the rules.
The Resolution
Under pressure from UASF, miners activated BIP 91 on July 20, 2017. This locked in SegWit support and made BIP 148’s enforcement mechanism unnecessary.
On August 1, 2017, big blockers launched their own chain: Bitcoin Cash. It forked from Bitcoin at block 478,559 with an 8 MB block size limit. Roger Ver, Jihan Wu, and developer Amaury Sechet led the effort.
On August 24, 2017, SegWit activated on Bitcoin at block 481,824. It changed how block capacity is measured, effectively increasing it.
SegWit2x’s backers cancelled the planned November 2017 hard fork. They couldn’t maintain support once SegWit had already activated.
What It Proved
The Block Size Wars answered Bitcoin’s most fundamental governance question: who’s in charge?
Not miners. Despite controlling most of the computing power, miners couldn’t force a rule change on unwilling users.
Not corporations. Despite 58 companies backing the New York Agreement, it was abandoned when users refused to follow.
Not developers. Bitcoin Core developers write code, but they can’t force anyone to run it.
Users are in charge. Anyone running a full node enforces the rules they agree with. This is decentralized governance in action. It’s messy, slow, and contentious. But it works.
The war also pushed development of the Lightning Network, giving Bitcoin a path to scale without sacrificing decentralization.
Keep Reading
- Learn how the blockchain records every transaction
- Understand how mining and proof of work secure the network
- See how the Lightning Network solved the scaling question