Coinbase CEO Rejects Proposal for Bitcoin Hard Fork in 2017
Brian Armstrong, CEO and co-founder of bitcoin wallet and exchange service Coinbase, has spoken out against the latest proposal introduced as part of bitcoin's ongoing scaling debate, calling the agreed-upon measures, "too little, too late".
At the end of last week, a group of representatives from the bitcoin mining and services sector, as well as Bitcoin Core developers, agreed to a plan that involved support for a proposed change to bitcoin's code called Segregated Witness, followed by a network hard fork – which would require users to download new software to stay compatible with the network – in 2017.
In total, the changes could raise the capacity of transaction blocks on the bitcoin network to as high as 4MB, proponents say, though this would happen over a period of months.
In a new blog post, however, Armstrong argued the proposal is "missing the mark", stating his belief that the Segregated Witness proposal "is not a good solution to help bitcoin scale" as it overstates the capacity increase it would bring to the network.
"If the plan is followed as written, SegWit would provide a slightly less than doubling of capacity by April 2016. Then we would go another 15 months (until July 2017) without any additional capacity increase. If bitcoin transactions per day continue to more then double annually, as they have been for the past few years, we will be in a worse position than we are today in the first half of 2017. This feels like a major oversight of the proposal."
With the remarks, Armstrong has emerged as the highest-profile critic of the new proposal, a group that also includes Xapo CEO Wences Casares.
Announced this weekend, the 2017 hard fork proposal saw a broad array of industry participants aligning around a roadmap that aims to bring together two opposing sides in the long-running block size debate.
Call for action
Overall, Armstrong proposes that a better solution for the scaling issue already exists in the form of the alternative proposal Bitcoin Classic, which would immediately increase the cap on the size of data blocks to 2MB, up from 1MB today.
Of note, is that the Coinbase CEO questioned the politics involved in the latest agreement, saying that "it perpetuates a centralized, single party system, in bitcoin".
Rather than a single group deciding on bitcoin's future, "bitcoin would be better off with a multi-party system, where several teams compete to add features to the protocol". This would allow the industry to "vote" on which system to adopt, he suggests.
He further critiqued the latest agreement as merely "a series of words", adding that there is no guarantee that they will be upheld by signatories.
In the end, Armstrong calls for bitcoin miners and business owners to upgrade to Classic, saying it will bring "immediate relief to bitcoin’s scaling problem and help restore confidence in the system".
If implemented, Classic would trigger initial block size increase to 2MB. This activation is contingent on 75% of the past 1,000 bitcoin transaction blocks being mined with the new code.
Once that happens, the changes would kick in after a 30-day waiting period.
Disclaimer: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Coinbase.
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