August 1 marks the eighth anniversary of a pivotal moment in Bitcoin's history - the first activation of Segregated Witness (SegWit) in 2017, an important software upgrade that reshaped the future of the network and triggered a hard fork.
This move, known as 'Bitcoin Independence Day', reduced miners' influence over the protocol and led to the creation of Bitcoin Cash (BCH), highlighting the community's divide on how Bitcoin should scale to support global usage.
"The block size war" is waged between those who want to keep Bitcoin's block size small and 'big blockers', an alliance of miners and businesses wanting to fit more transactions into each block to make BTC suitable for everyday payments and commercial transactions.
Major supporters, led by 'Bitcoin Jesus', Roger Ver, argue that Bitcoin has not yet achieved Satoshi Nakamoto's vision of a peer-to-peer cryptocurrency system because the block space limitations of the ledger can never scale enough to accommodate transactions worldwide.
Node operators, developers, and BTC users have strongly opposed the proposal for larger blocks, arguing that increasing the block size would also raise storage requirements for node operators.
The potentially high storage demands would make running a node overwhelming for the average user, thus concentrating the Bitcoin network into the hands of a few large entities that can run the necessary hardware.
Bitcoin Improvement Proposal (BIP) 91 was activated in August 2017, paving the way for scaling through the BTC Lightning Network, a way to facilitate off-chain payment channels between two or more users, with a final settlement on the Bitcoin ledger.
On August 1, 2017, the big blockers split from the Bitcoin network, leading to the creation of BCH and forever changing Bitcoin's history.
Where Are Bitcoin and BCH Now?
Since the Bitcoin Cash hard fork in August 2017, the price has fluctuated, reaching an all-time high of around $1,600 in May 2021 during the previous bull market cycle.
However, the price quickly collapsed, hitting an all-time low of around $90 during the bear market in 2022. Currently, BCH is trading at around $552 — a price equivalent to eight years ago, shortly after its launch.
Meanwhile, the price of Bitcoin has increased by about 4,200% during that same eight-year period. On August 1, 2017, the price of BTC was trading at around $2,718 and is now trading at around $115,000, down from an all-time high of around $122,000 recorded in July.
Today, Bitcoin has a market capitalization of over $2.2 trillion, while Bitcoin Cash has a total market capitalization of around $10.9 billion.
The split between these two networks highlights the debate between those who want to use the BTC network for various purposes, including retail purchases and file storage, versus those who define BTC as a decentralized store of value — a conflict that continues to this day.