The Block Size War: Bitcoin's Civil War That Forked the Chain

On 1 August 2017, Bitcoin split in two. Everyone who owned bitcoin that morning woke up owning the same number of coins of a new currency, Bitcoin Cash, as well. It was the end of a three-year fight that cost Bitcoin two of its best-known developers, filled its online forums with accusations of censorship, and tested whether anyone could change the rules of a system that nobody officially runs.

The fight was over a single number. Bitcoin records payments in blocks, pages of a shared ledger added roughly every ten minutes. In 2010 Satoshi Nakamoto, the pseudonymous inventor, had quietly capped each page at one megabyte, a guard against spam. By 2015 the pages were filling up. That limited Bitcoin to a handful of payments per second, and when demand rose, users bid against each other for space, the way buyers bid up a share when sellers are scarce. On 22 December 2017, at the height of the boom, the average fee for one payment reached about $55.

Two camps

The "big blockers" wanted to raise the cap. Their case was simple: Bitcoin was meant to be cash, and cash that costs $20 to send is not cash. Their side included Gavin Andresen, the developer Satoshi had handed the project to; Mike Hearn, a former Google engineer; Roger Ver, an early investor nicknamed "Bitcoin Jesus"; and Jihan Wu, co-founder of Bitmain, the largest maker of mining machines.

The "small blockers", who included most of the volunteers maintaining Bitcoin Core, the main software, said bigger pages would make the ledger expensive to store and check. Today anyone with a laptop can run a full copy of the ledger and verify every payment, a node in the jargon. Push the cost up and only data centres could do it, leaving a few companies in charge. Their answer was to make room inside the existing limit and move small, everyday payments onto a second layer, later built as the Lightning Network, which works like a bar tab that is settled on the main ledger only when it closes.

Forum wars and failed forks

In August 2015 Andresen and Hearn released Bitcoin XT, a rival version of the software that would raise the cap to 8MB if enough miners signed up. Changing the rules this way is a hard fork: if part of the network accepts the new rules and part does not, the ledger splits in two, like a company that suddenly has two share registers.

The moderators of r/Bitcoin, the largest Bitcoin forum on Reddit, started deleting posts that promoted XT, arguing it was effectively a different currency. The forum's lead moderator, known as theymos, said he would remove any moderator who reversed the policy. Many users moved to a rival forum, r/btc, which became the big-block camp's home. XT never won enough support.

In January 2016 Hearn quit. In an essay titled "The resolution of the Bitcoin experiment", he wrote that Bitcoin had become "a system completely controlled by just a handful of people", and said he had sold his coins. A second attempt, Bitcoin Classic, offering 2MB, also stalled. In May 2016 Andresen lost his access to change Bitcoin Core's code after he publicly backed Craig Wright's claim to be Satoshi, a claim a London court later rejected.

New York, a user revolt and the split

The small-block side's own proposal was Segregated Witness, or SegWit. It moved the digital signatures, which take up much of each payment's space, into a separate section, like printing the signatures on a separate sheet so more payments fit on each page. It needed 95 percent of mining power to signal support before it switched on. Miners aligned with the big-block camp, including pools linked to Bitmain, held out.

On 23 May 2017, at the Consensus conference in New York, 58 companies from 22 countries signed the New York Agreement, brokered by Barry Silbert's Digital Currency Group. They claimed about 83 percent of mining power. The deal, known as SegWit2x, was a trade: switch on SegWit first, then double the block size to 2MB about three months later. The Bitcoin Core developers were not party to it.

At the same time, a group of users threatened a revolt of their own. Under a plan called BIP 148, a "user-activated soft fork", their nodes would refuse blocks from miners who did not support SegWit from 1 August. Faced with that, miners fell into line. SegWit locked in during August and went live on 24 August 2017.

The big blockers who wanted no part of SegWit left first. On 1 August, backed by Roger Ver and with Bitmain's support, they launched Bitcoin Cash with an 8MB cap. The 2MB half of the New York deal collapsed on 8 November 2017, when six of its organisers, including Mike Belshe, Jihan Wu and Erik Voorhees, wrote that they had "not built sufficient consensus" and called it off.

Who won, and what it cost

The market gave its verdict quickly. Bitcoin kept the name, the exchanges' main listing and nearly all the value. Bitcoin Cash peaked close to $3,800 in December 2017, according to CoinGecko. In mid-October 2026 it traded near $280, while bitcoin traded near $82,000.

Bitcoin Cash then split again. On 15 November 2018 a faction led by Craig Wright and the online gambling entrepreneur Calvin Ayre broke away to form Bitcoin SV, after a so-called hash war, a contest of mining power, against Ver's side. Bitcoin SV traded near $19 in October 2026.

The big-block camp's best-known figure ended up in court for other reasons. Ver, who gave up his US citizenship in 2014, was arrested in Spain in April 2024 on US tax evasion charges. In October 2025 he agreed a deferred prosecution deal with the US Justice Department and paid about $50 million in back taxes and penalties; the charges are to be dropped if he complies.

The war never fully ended. In 2025 Bitcoin Core's decision to lift a long-standing limit on the amount of non-payment data that can be attached to transactions, released in version 30 that October, set off one of the most divisive rules disputes since the block size fight. Thousands of node operators switched to a rival program, Bitcoin Knots.