It's Possible to Increase Bitcoin's Block Size Without a Hard Fork: Blockstream Co-Founder

Mark Friedenbach, a bitcoin developer and co-founder of the popular Blockstream company, has recently revealed a scaling approach he called “forward blocks,” which could essentially help increase BTC’s block size without a hard fork.

Currently, bitcoin can accommodate a small number of transactions per second, and is unable to compete with traditional payment networks such as that of Visa. While some believe the cryptocurrency should scale through a block size increase – which would require a hard fork - others argue this approach will lead to centralization, and prefer other solutions.

A hard fork is essentially a change to the network that isn’t backwards-compatible, meaning all of the cryptocurrency’s users need to upgrade to keep up with the change. A soft fork, on the other hand, can be backwards-compatible.

Friedenbach’s approach, according to a transcript of his presentation at the Scaling Bitcoin workshop, would be able to boost the flagship cryptocurrency’s on-chain transaction capacity through a Proof-of-Work (PoW) alternation achieved through soft forks and “privacy-enhancing alternative ledgers (side chains).”

According to Friedenbach, a former space apps developer at NASA, the forward blocks approach could ultimately help increase the cryptocurrency’s “settlement transactions volume to 3584x current levels,” while improving censorship resistance via sharding.

Here, the developer refers to sharding as a change to the PoW system and a series of developments that would see bitcoin’s blockchain scale. Most cryptocurrency users refer to sharding when mentioning Ethereum’s scaling solution, which would see multiple network computers divide transaction workload between them to scale the blockchain. These two, per Friedenbach, are “largely not” the same.

Speaking to CoinDesk, the former NASA employee noted his approach could help with the scaling debate, as the community often opposes hard forks because of how hard it can be to do them safely. He was quoted as saying:

Forward blocks makes that whole argument pointless. We don't need a hard-fork to scale bitcoin, if and when we decide to do so. It can be accomplished as a soft fork, like SegWit was.

SegWit, as CryptoGlobe covered, was launched one year ago and recently saw its usage go over 50%. During his presentation, he further suggested it could be good to replace bitcoin’s current halving mechanism, which halves block rewards every four years. To him, a more linear approach could be more beneficial to the cryptocurrency, as it wouldn’t suddenly affect the ecosystem.

Notably, Friedenbach reportedly got to his forward blocks approach by starting out thinking about a “development of a dual PoW change where you introduce a new PoW with a soft fork.” While he noted this wasn’t a proposal, it’s a “good place” to start thinking about the solution.

 

A Controversial Solution

While some could look at the former NASA contractor’s approach as revolutionary, CoinDesk reports not everyone is excited about it. Pseudonymous bitcoin developer “Shinobimonkey” was quoted as saying it was a “network attack being called an upgrade.”

Blockstream’s CEO Adam Back noted that “it’s OK,” as discovering mechanisms “can be useful and separate from whether it would be practical technically and in terms of user consensus.” To him, it’s so far just another tool.

Per the news outlet, Friedenbach isn’t advocating to use forward blocks on bitcoin either, but is merely trying to put the option out there. He’s reportedly set to test it on “Freicoin,” an altcoin he created.

Buying Bitcoin At All-Time High Was Better Than Keeping Money In Argentinian Bank, Trader Reveals

Josu San Martin, a Mexico City-based Bitcoin “quasi-maximalist”, recently revealed that if the residents of Argentina, a country experiencing a major financial crisis, had purchased Bitcoin (BTC) at the “highest point of the ‘biggest bubble in history’” (in 2017),  they would have still “been better off” than leaving their funds in an Argentinian bank.

Earlier this month, Twitter user Matias (@MatiasTrader) had noted that Bitcoin had reached “an all-time high in Argentinian Pesos (ARS).” This, as the South American nation is suffering from extremely high levels of inflation.

High Levels Of Inflation Does Not Necessarily Mean Bitcoin Will Help?

Interestingly, Twitter user Moises Cassab (@josusanmartin) pointed out that the main argument being made is that the Argentinian Peso is a “terrible store-of-value (SoV).” Moises also appeared to suggest that there was no meaningful relationship between the declining value of Argentina’s national currency and the arguably better performance of Bitcoin, the world’s most dominant cryptocurrency.

Moises remarked: 

Buying Celine Dion 2020 tickets would of outperformed the arg peso. Tell me how Celine Dion tickets are a terrible store of value.

Venezuelans Still Need To Use The Bolivar “To Survive”

According to Josu San Martin:

In a long enough timeline, the Argentinian peso doesn't look that much different from any other Latin American currency.

Indeed, the residents of other nations in the same region such as Venezuela are enduring one of the worst economic crises in their country’s history. However, recent reports which appeared to have suggested that cryptocurrencies were increasingly being used as a hedge against inflation in Venezuela may not be entirely accurate.

Focusing On Basic Necessities

Alejandro Machado, the co-founder of the Open Money Initiative (OMI), a project dedicated to assisting nations with “collapsing monetary systems,” had revealed recently that the citizens of Venezuela have not completely abandoned the Bolivar.

Although Machado acknowledged that bitcoin trading in Venezuela had reached record-level highs, he said that Bitcoin and other cryptocurrencies were “too technical” for most Venezuelans. He also mentioned:

Access to products [in Venezuela] is the number one thing [that people are looking for.] Do I have enough to eat this week or do I need to reinvent the ways that I access food?