On August 1st 2017, a group of Bitcoiners decided to take a stand against a number of corporate heavyweights and greedy miners. In a time when a powerful and influential branch of the community wanted to hard-fork Bitcoin in order to increase the block size, an opposing faction consisting of developers, engineers and Bitcoin “first class citizens” (folks who run their own full nodes to validate transactions) was born.
They called it “UASF” (User-Activated Soft Fork) as a more or less intentional reference to the United States Air Force and encouraged every node operator to activate SegWit (Segregated Witness, the scaling solution which didn’t require a community-dividing chain split).
August 1st 2017 – Flag Day
On August 1st, thousands of nodes signalled support for BIP 148, triggering the UASF and marking the most significant schism within the community. The move decided the direction and priorities of the Bitcoin network and saw users choose between fundamentals and short-term growth. In a free market, is a truly decentralized protocol in which anybody can participate more important than PayPal 2.0?
As it turned out, yes.
There is nothing unique about instant payments, but a robust blockchain for payment settlements is extremely precious.
Fortunately for the value proposition of Bitcoin, the UASF side was strong and vocal enough to become victorious. It laid the foundations of the so-called “toxicity” in the space, and proved that the protocol is anti-fragile and has a very active group of defending “white cells”.
The market dynamics which followed have proven to the world that Bitcoin is like a rock that can endure even the most aggressive of storms. Consequently, instead of trying to change the protocol to fit their business models, narratives, and expectations, entrepreneurs in the Bitcoin space have been forced to accept that it’s them who must adapt. This is an essential precedent to be set, as Bitcoin’s technological uniqueness is given by its approach to decentralization.
Two years after the first Bitcoin Independence Day, the protocol is stronger than ever.
New hashrate all-time highs are reached on a regular basis, proving that BTC is more profitable than any fork, and that there is a greater amount of trust that participants put in its security. Every serious investor in the space, from Jack Dorsey’s Square all the way to Microsoft, has chosen to build on top of Bitcoin (as opposed to Bitcoin Cash, Bitcoin Gold, Bitcoin SV, and every other altcoin).
While some ideologically driven commentators complain about BTC’s drifts from the original design or previous community agreements, the engineers and developers constantly find new ways to make use of Bitcoin’s strength and network effect. As Bitcoin Cash undergoes yet another hard fork to increase the block size and consequently reduce the degree of decentralization, the original chain constantly looks for ways to maximize the efficiency of the 1 megabyte blocks: greater SegWit adoption reduces fees, sidechains like Liquid are built to move transactions between exchanges on a transitional layer, improvements like Schnorr signatures and Taproot increase transaction privacy while reducing the size of the average transaction, and the Lightning Network insures instant and “unfairly cheap” transactions without compromising the security of the main chain.
Furthermore, there’s a lot more to Bitcoin than scalability: Blockstream has launched two satellites to guarantee that even people around the world without internet access can make transactions – most likely those living under oppressive regimes that take to measures such as internet. Other enthusiasts are working on ham radio networks which make use of Cold War-era transmission tricks to bypass borders when relaying their BTC transactions.
Censorship resistance and anti-fragility are much more than a myth, and the coming years will only prove the robustness of the protocol. Until then, let’s celebrate the second anniversary of Bitcoin’s independence!
For a deep-dive into the story of SegWit adoption, check out this article in the Bitcoin Magazine.