Get ready for the sequel to the block size debate in Bitcoin
The block size debate, an epic programming and trolling battle between two factions within the Bitcoin community the likes of which the internet has never seen before, is over. With the failure of Segwit 2x, the failure of Bitcoin Cash to overtake the market cap of Bitcoin, the wider adoption of Segwit in recent weeks, and the imminent deployment of the lightning network it’s becoming very clear to all observers that the block size debate is over and that Bitcoin Core’s approach is the winner. Roger Ver’s embarrassing interview on the Alex Jones channel marked what I would consider the end of this chapter in Bitcoin’s history. Since then the Bitcoin Cash promoters appear to have backed off and are now in the process of regrouping. At the same time (coincidentally?) the spam attacks on the Bitcoin network have subsided.
As the title indicates, I don’t think this means peace and tranquility for the Bitcoin community. Not everyone is going to be become a bitcoin maximalist…..yet. The next war, which is now brewing, is going to be fought over the anonymity of Bitcoin. In the end, Bitcoin will adopt the best anonymity solution, but it will be a long and hard fought. You can bet that the people who supported a sub-optimal scaling solution will also support a sub-optimal anonymity solution as well. There will be all kinds of FUD, trolling, and general hysteria. If scaling was big, anonymity will be even bigger. The stakes are huge. Governments and banks don’t want anonymous crypto used by the masses so they will be willing to spend large sums of money to split the community, create in-fighting and delay the deployment of an anonymity solution.
In the privacy landscape today, we have two main options for implementation in Bitcoin Core:
- ) ZK-Snark based privacy
- ) Confidential transactions based privacy
ZK-Snarks, which stands for Zero Knowledge Succinct Non-Interactive Argument of Knowledge, is the technology that makes several existing cryptocurrencies private. The list of cryptos that support ZK-Snarks is: Zcash (from which all other are derived from), ZClassic, and Bitcoin Private.
Confidential Transactions was first implemented by Gregory Maxwell in the Sidechain alpha project released by Blockstream in 2014. It is also part of the solution that Monero currently implements in the form of it’s RingCT transactions.
It seems that there are two camps forming around these approaches. It will take time for consensus to form around which approach is best and the details of implementation in core and I believe we are about to enter a time of experimentation. With the launch of Bitcoin private, we will see how Bitcoin holders react to getting a zksnark based coin and how the network functions.
At the San Fransisco developers meetup on February 21, Rhett Creighton (lead developer for Bitcoin Private) stated that he’s open to implementing the confidential transactions solution into Bitcoin Private so it’s possible that Bitcoin private could have both options. We’ll just have to see how it all plays out, but there’s sure to be a big debate. The great thing about having alt-coins is that we can test hypotheses and see which approach works better.
In conclusion, it appears that the market is rewarding experimentation at the moment and with the scaling debate largely settled or at least put on hold for a while, privacy is the next front in the war for Bitcoin’s future.
