The scaling debate within the Bitcoin community was one of the most pivotal and contentious periods in cryptocurrency history. It pitted two ideological camps against each other, ultimately leading to a significant fork in the protocol. This is the story of the technical disagreements, failed compromises, and the strategic decisions that resulted in the creation of Bitcoin Cash (BCH).
At the heart of the conflict was a fundamental question: how should the Bitcoin network scale to handle more transactions? One camp, often referred to as "big-blockers," advocated for increasing the block size limit to allow more transactions per block. The other camp, the "small-blockers," favored off-chain scaling solutions, like the Lightning Network, and were resistant to changing the core protocol's block size.
This disagreement culminated in a series of high-stakes meetings and proposed agreements, the most famous of which was the New York Agreement (SegWit2x). This was an attempt at a compromise, but as events unfolded, it became clear that a middle ground was unsustainable.
The Road to the New York Agreement
By early 2017, the Bitcoin network was experiencing severe congestion, leading to slow transaction times and high fees. The need for a scaling solution was urgent. The Digital Currency Group (DCG) founder, Barry Silbert, took the initiative to break the deadlock. He embarked on a strenuous one-on-one outreach campaign throughout April 2017 to soften the positions of key industry players and developers.
A face-to-face meeting was organized for May in New York, coinciding with the annual Consensus conference. However, a last-minute refusal by a key figure from the small-block side to attend set the tone for the challenges ahead. Instead, a representative known for inflammatory rhetoric was sent, whose presence was protested by several major companies at the meeting.
Despite these hurdles, the meeting proceeded on a sunny morning later that month. Attendees, including representatives from major wallets, payment processors, and mining pools, debated under the strong sun—a physical testament to the heated discussions. The central point of contention was whether to bundle the activation of Segregated Witness (SegWit) with an immediate hard fork to increase the block size.
Most companies present argued that binding the two was essential. They emphasized that their businesses were suffering from high fees and that without a clear path to on-chain scaling, they would be forced to support alternative cryptocurrencies. Surprisingly, even some traditionally small-block supporters in the room agreed that a binding agreement was necessary, believing that a broad industry consensus could overpower any minority opposition.
Facing threats of walk-outs from several significant players, the attendees eventually reached the New York Agreement, or SegWit2x. This consensus proposed activating SegWit and subsequently executing a hard fork to increase the block size to 2MB.
The Unraveling of a Consensus
The compromise was almost immediately undermined. Before the official agreement could be announced, a developer from the Bitcoin Core camp preemptively published a proposal known as BIP91. Critically, it used the same voting mechanism (bit 4) that the New York Agreement had designated for its own proposal.
This created intentional confusion. While BIP91 also aimed to activate SegWit, it completely omitted the promised block size increase. This allowed certain mining pools to publicly claim support for the New York Agreement while privately signaling that their votes were only for BIP91, intending to abandon the扩容 (scaling) part of the deal later.
Concurrently, a more radical movement from a segment of the small-block camp began aggressively promoting User-Activated Soft Fork (UASF). This was a dangerous proposal that, if implemented, could have caused the network to split into two competing chains, potentially leading to transaction reversals and significant financial losses for users and exchanges who were unprepared for the technical consequences.
In response to this threat, the big-block community developed a defensive countermeasure: the User-Activated Hard Fork (UAHF). Initially conceived as a contingency plan to preserve transaction history if UASF caused chaos, it quickly evolved into something more. The community realized that by implementing UAHF with specific technical parameters, they could create a new, permanent blockchain with a larger block size—independent of Bitcoin.
Foreseeing the inevitable betrayal of the New York Agreement by certain signatories, this defensive plan was put into action. Bitcoin Cash was born from this UAHF, creating a new path for on-chain scaling. 👉 Explore more strategies for understanding blockchain forks
The Aftermath and Legacy of Bitcoin Cash
The creation of Bitcoin Cash was met with mixed reactions. Some signatories of the New York Agreement felt betrayed by its launch, even though they themselves had already planned to renege on the scaling portion of the deal. The entire episode highlighted a deep lack of trust and an irreconcilable philosophical divide within the community.
Bitcoin Cash continued on its own path, later undergoing upgrades to increase its block size further to 32MB, significantly boosting its transaction capacity. The original Bitcoin chain continued with SegWit and later embraced off-chain scaling solutions. The fork demonstrated that when community consensus fails, code can ultimately decide the direction of a protocol.
Frequently Asked Questions
What was the main goal of the New York Agreement (SegWit2x)?
The primary goal was to break the scaling deadlock by combining two solutions: activating Segregated Witness (SegWit) to optimize block space and committing to a hard fork that would increase the block size to 2MB. It was designed as a compromise between the two opposing factions.
Why did the SegWit2x agreement ultimately fail?
The agreement failed due to a lack of good faith from certain signatories. Before it was even officially announced, alternative proposals like BIP91 created confusion and provided an avenue for parties to support SegWit activation while planning to abandon the promised block size increase, leading to a collapse of trust.
What is the key technical difference between Bitcoin (BTC) and Bitcoin Cash (BCH)?
The most fundamental difference is their approach to scaling. Bitcoin Cash prioritizes on-chain scaling through significantly larger block sizes (originally 8MB, now 32MB), allowing more transactions to be processed directly on its base layer. Bitcoin has focused on optimizing existing block space (with SegWit) and building second-layer solutions like the Lightning Network.
How does a User-Activated Hard Fork (UAHF) work?
A UAHF is a protocol upgrade that becomes active regardless of miner support. It is enacted by nodes and economic participants (like exchanges and wallets) who adopt the new rules at a specific block height. This is in contrast to a miner-activated fork, which requires majority hash power to signal for the change.
Was the creation of Bitcoin Cash considered a success?
Success is subjective. Technically, the fork was executed smoothly, creating a new, functioning blockchain. It provided a choice for users and businesses who preferred a big-block scaling vision. However, it also fragmented the community and its value has not surpassed that of Bitcoin, demonstrating the challenges of competing with an established network effect.
Can something like the scaling debate happen again in cryptocurrency?
Yes, governance and upgrade mechanisms remain complex challenges for decentralized networks. Fundamental disagreements on protocol direction can always lead to contentious forks. The history of Bitcoin Cash serves as a classic case study in how these disputes are resolved—or not—through code and community action. 👉 Get advanced methods for researching crypto projects