Bitcoin Independence Day: 8 Years After the Block Size War

August 1 marks the eight-year anniversary of an important milestone in the history of Bitcoin - the first activation of Segregated Witness (SegWit) in 2017, a significant software upgrade that reshaped the future of the network and triggered a hard fork. This move, referred to as "Bitcoin Independence Day", reduced the influence of miners on the protocol and led to the creation of Bitcoin Cash ( BCH ), highlighting the division in the community on how Bitcoin should scale to support global usage. The "block size war" takes place between those who want to keep Bitcoin's block size small and the "big blockers," a coalition of miners and businesses who want to fit more transactions into each block to make BTC suitable for everyday payments and commercial transactions. Major supporters, led by "Bitcoin Jesus", Roger Ver, argue that Bitcoin has not yet realized Satoshi Nakamoto's vision of a peer-to-peer cryptocurrency system because the limited block space of the ledger can never be expanded enough to accommodate transactions globally.

Node operators, developers, and BTC users have strongly opposed the proposal for larger blocks, arguing that increasing block size would also increase storage requirements for node operators. The potentially high demand for storage will make running a node too much for the average user, thus concentrating the Bitcoin network into the hands of a few large entities that can run the necessary hardware. The proposed improvement Bitcoin (BIP) 91 was activated in August 2017, paving the way for scalability through the BTC Lightning Network, a way to facilitate off-chain payment channels between two or more users, with a final settlement on the Bitcoin ledger. On August 1, 2017, large blockers split from the Bitcoin network, leading to the creation of BCH and changing Bitcoin's history forever.

Where Are Bitcoin And BCH Now? Since the Bitcoin Cash hard fork in August 2017, the price has fluctuated, reaching an all-time high of around 1,600 dollars in May 2021 during the previous bull market cycle. However, the price quickly collapsed, hitting an all-time low of around 90 dollars during the bear market of 2022. Currently, BCH is trading at around 552 dollars — a price equivalent to eight years ago, shortly after its launch. Meanwhile, the price of Bitcoin has increased by about 4,200% over the same eight-year period. On August 1, 2017, the price of BTC was traded at around $2,718 and is currently trading at around $115,000, down from an all-time high of about $122,000 recorded in July.

Today, Bitcoin has a market capitalization of over 2.2 trillion dollars, while Bitcoin Cash has a total market capitalization of around 10.9 billion dollars. The division between these two networks highlights the debate between those who want to use the BTC network for various purposes, including retail purchases and file storage, versus those who define BTC as a decentralized store of value — a conflict that continues to this day.