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The latest developments in the Cryptowar are what appears to be a developing schism between some Lightning Network developers and contributors to Bitcoin Core after Joseph Poon, a Lightning Network developer, Stephen Pair from BitPay, Christopher Jeffrey from Purse and Fedor Indutny, published an extension blocks proposal that both increases on-chain capacity and fixes malleability.

Discussions are heated in somewhat private conversations with one source calling an exchange between Matt Corallo – a former Blockstream employee and Bitcoin Core developer – and Jospeh Poon, as “nasty.”

In semi-public discussions, Poon said yesterday that “the extension block proposal is… a litmus test for corruption in the Bitcoin community.” He further added that “Core is getting what they want (soft fork plus malleability fix), but oppose due to nonsensical reasons.” Before saying “without the ability to make pragmatic decisions Bitcoin as a project is stagnant and dying.”

Corallo said that “extension blocks are a very bad idea,” before adding that “much of the western businesses I’ve asked have no interest in any extension block proposal.” He was asked to name the businesses by a discussion participant but failed to do so.

Interestingly, Poon said that “a malleability fix simpler than SW is provided on the extension block and Lightning on the extension block is superior to SW.” David Chan clarified to say “lightning is safer because there is a baked in pre-allocated space for two LN transactions per extension block. Helps defend against the catastrophic cascade closure of LN channels.”


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Poon told CCN that segwit can still be activated with small changes. Clarifying the on-chain capacity that would be added, he stated it would be 3MB, up to 9MB. He further said that “this includes a malleability fix whose individual component is smaller than segwit, as it does not use the weights and discounting.”

The main criticism by other Bitcoin Core developers appears to be regarding timing. Eric Lambrozo, for example, said it would “lead to further development delays since [it] will still require review, obligatory bikeshedding (i.e. determining DoS parameters), testing, implementation, building ecosystem support, adapting existing applications, etc…”

Some Bitcoin Core developers have called the proposal as “technically sound,” while others have used the general argument against soft-forks and applied it to extension blocks. Overall, it appears opinion among Bitcoin Core supporters, including developers, is mixed.

As for miners, CCN has learned F2Pool supports the proposal. Bitfury and BTCC have not yet clarified their stance. If they do support extension blocks, consensus might be within reach, especially as this proposal is a soft-fork.

That means a chain split is very unlikely according to the usual arguments in favor of soft-forks by Bitcoin Core developers. That’s because old nodes can continue to operate, rather than being cut-off the network as would be the case in a hard-fork. As such, it’s opt-in, according to the extension blocks proposers, as well as backwards compatible.

That also means unanimous consensus is not necessary because it’s opt-in. Those not in favor of the proposal can simply just not upgrade, continuing as they are, while others can use the new features, allowing both groups to co-exist within one chain.

It provides to both sides what they want, according to extension blocks proposers. The bigger blocks side gets on-chain capacity, Bitcoin Core gets a malleability fix, allowing for the Lightning Network and other layer two protocols.

A Grand Compromise?

“This latest move is technically very clever, and politically brilliant.” – Emin Gun Sirer, Cornell Professor, told Forbes. You’d think so, but we’ll have to wait and see as, despite providing a malleability fix, Blockstream current and former employees are strongly arguing against it. Their reasons, however, appear hallow. As stated earlier, they amount to general arguments against soft-forks (despite arguing in favor of soft-forks for years), and arguments that it would lead to further delays.

Poon said that extension blocks were implemented in two weeks, “we can test and deploy within months.” Alex Petrov of Bitfury gave a time estimate of around 5-6 months, that’s this autumn/winter.

If such timeline can indeed be achieved then bitcoin might come out stronger, but seeing as Blockstream employees seem to be against it, any merging in Bitcoin Core appears difficult. The proposers say they will flesh out the details, and while it’s not clear whether a pull request will be made, you’d think they will do so.

In such event, it will all come down to one man, Wladimir J. van der Laan, the current maintainer of Bitcoin Core, who has the power to merge the proposal or otherwise. If he does merge, as he did segwit despite it clearly being highly controversial, then the Cryptowar may be over. If he doesn’t, then so-long bitcoin.

Because this currency can’t continue for much longer with such high fees and sometimes delays of days to move value from a to b in this 21st century. And, while I have no views on this specific proposal, I’d welcome whatever breaks this stalemate because this entire debate is becoming far too boring.

Everything that had to be said has been said. It’s now up to businesses and miners to pick something and just get on with it or users and businesses will continue leaving, as will the focus and attention of those who do sort of continue to stay.

 Featured image from Shutterstock.

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Posted by Andrew Quentson

Feel free to contact me at [email protected] with any information you may have.