- Bitcoin Unlimited was the third attempt to scale Bitcoin
- The blockchain was flexible and allowed for movable block sizes
- Bitcoin Unlimited was usurped by Bitcoin Cash in 2017
Bitcoin Unlimited was one of many Bitcoin challengers that emerged as a result of the Bitcoin block size wars. It was more successful in many ways than its predecessors, Bitcoin XT and Bitcoin Classic, but it still went the same way as those other challengers to the Bitcoin crown. What was Bitcoin Unlimited and what made it so different from the other attempts to scale Bitcoin?
Flexible Block Size
Bitcoin Unlimited seems to have been born from a ‘Gold Collapsing Bitcoin Up’ discussion thread on the BitcoinTalk forum. This discussion, which spanned three years, saw in the launch of Bitcoin XT as the first attempt to scale Bitcoin, which led to a chain reaction of other attempts, called the block size war.
Whereas Bitcoin XT and Bitcoin Classic had favored fixed block sizes, Bitcoin Unlimited was a radical departure from this model – miners and node operators were allowed to signal which block size limit they preferred, find the limit having a majority consensus and automatically track the largest proof-of-work, regardless of block size.
This flexibility was seen by its proponents, chiefly big block advocate Roger Ver, as the ‘ultimate’ ‘way to solve the block size issue – let the miners and node operators choose which chain they would prefer and let the transaction flow dictate block size.
When Is a Hard Fork Not a Hard Fork?
Bitcoin Unlimited launched in April 2016, describing itself as “a tool to help the ecosystem to find consensus about a blocksize limit increasing hardfork and execute it”, rather than being a fork of Bitcoin. However, many saw it as a hard fork nonetheless, at least in ideology.
The immediate danger posed by such a move was that Bitcoin Unlimited miners would send large blocks through the regular Bitcoin system without anybody being willing to process them, causing them to be lost. However, Bitcoin Unlimited proponents claimed that market dynamics would prevent this from becoming too much of an issue.
Bitcoin Unlimited Takes Off
Bitcoin Unlimited hardly pulled up any trees in its first few months, with under a hundred nodes for the first six months of its life, but towards the end of 2016, when the block size war really began to heat up, with 400 nodes running Bitcoin Unlimited by the end of the year. This exploded to 720 by February 2017. In March, Jihan Wu, founder of what was then the world’s largest mining organization, Antpool, said in early March 2017 that Antpool would be switching from Bitcoin Core to Bitcoin Unlimited, right at the time when the block size war was at its peak.
However, just a week after this, when Bitcoin Unlimited looked like it was about to mount the most serious challenge to Bitcoin yet, a serious bug was found in its code which caused the number of nodes to flash crash by 50%. Bitcoin Core supporters reveled in the setback, although their schadenfreude was to be short-lived – the node count continued to grow, surging to 971 nodes in July 2017.
Bitcoin Cash Arrives
Bitcoin Unlimited’s demise wasn’t anything to do with the protocol itself, with the upstart instead being a victim of SegWit and the emergence of Bitcoin Cash. The New York Agreement of May 2017 led to the potential implementation of the non-hard fork upgrade to increase the block size, which was formalized in July 2017 when Jihan Wu switched sides and said that he and his organizations would support SegWit.
This dealt a huge blow to Bitcoin Unlimited, and its death was sealed when Ver and others, including Craig Wright, announced Bitcoin Cash, another Bitcoin fork created on the back of the implementation of SegWit. With everyone looking to Bitcoin Cash with its 8MB blocks as the most legitimate challenger, node operators began turning away from Bitcoin Unlimited – the count halved within six months as Bitcoin Unlimited developers moved over to Bitcoin Cash, and then the node count plummeted from 528 to just 100 within a week in February 2018, effectively signaling the end of user interest in the protocol.
Technically speaking Bitcoin Unlimited soldiers on by itself, with two nodes still processing any transactions that accidentally happen to land on the blockchain, and in fact its founders (not Roger Ver) want to bring it back to life in some form – the Nexa blockchain, with associated cryptocurrency, launched in June 2021.