In this week’s news, a scaling agreement for Bitcoin was reached, with implications for both the digital currency and online cooperation more broadly. The agreement would allow for more transactions in a single Bitcoin block by enlarging each block’s size to 2Mb and decreasing the amount of data recorded in each transaction (by implementing a change called Segwit). Implementation is scheduled to happen in the next 6 months, pending community approval. The move is intended to help deal with higher transaction fees and longer waiting times that have been occurring as Bitcoin gains wider use and prices hit an all-time high.
Beyond the impact that this decision will have on Bitcoin, it also provides a case study for the governance of a leaderless distributed technology. The agreement is the culmination of a long-running debate in the Bitcoin community as to what modifications to the currency are needed, a matter which is complicated by the fact that any change of this sort would need to be universally adopted. Somewhat ironically, final consensus on the fate of the digital technology was ultimately reached in-person at a conference this week. The implementation of the Segwit component still depends on it receiving 80% support from a selection of Bitcoin miners that will use the blockchain itself to signal their support for or against it (see here for details). It may not exactly be a “one person, one vote” national election, but it is still an impressive demonstration of using digital voting to decide an important matter.