This week, veterans of the Bitcoin blocksize war from 2015-2017 were met by a strange sight: Bitcoiners complaining high fees. It’s worth reminiscing about some history if this doesn’t seem odd.

In the past, the “small-blockers”, the faction who retained the claim to Bitcoin during the blocksize wars, have supported fees in times of congestion because they saw it as a necessary compromise to achieve decentralization. The big blockers, the faction which split into BCH/BSV, were those who aimed to keep fees as low as possible. This trend has recently reversed itself for some Bitcoiners.

Nic Carter, CoinDesk’s columnist, is a partner at Castle Island Ventures. This public venture fund, which focuses on blockchain technology, is based in Cambridge. He is the co-founder and CEO of Coin Metrics a blockchain analytics company.

Roger Ver , a big-block (and fee-reduction enthusiast) who has been a vocal critic of Bitcoin core developers for refusing to increase the block limit and reduce fees, infamously lamented that “babies were dying” five years ago because Bitcoin core developers refused to increase the block size (and ease fees). The big blockers’ main argument was that they needed more space in the block to accommodate more transactions. Theoretically, this would lower fees and make it simpler to scale blockchains to global use for small payments.

Small blockers, on the other hand, were adamant about the need for restraint and wanted to keep the blockchain compact so it could remain decentralized and resistant to censorship. The idea was that a larger blockchain would be maintained only by industrial node operators and thus could be easily co-opted or manipulated by corporate or state actors. Instead of increasing block size to temporarily ease fee pressure, Bitcoiners adopted a multi-layered approach in the scaling wars.

By 2023 it will be 2017 all over again. But this time, many Bitcoiners who were once staunch supporters have changed their minds and now embrace the “fees shouldn’t be high” perspective

Deferred settlement is the way all payment systems work. Wire transfers are not used to pay for cigarettes – you use a network such as Visa that uses deferred settlements and settles with partner banks through ACH. Wire payments are usually reserved for large transactions, such as down-payments of a home where certainty is key.

I have always been a supporter of small blocks, which is why I chose Bitcoin Cash over EOS. I am also generally sceptical about the approach taken by other blockchains, such as Solana or EOS. Accepting smaller blocks will result in higher fees when the blockchain is busy. In the past, Bitcoiners had to use philosophical arguments to explain why convenience was not worth the sacrifice in terms of decentralization. Gregory Maxwell, the developer who is arguably most influential on the small-block side of the debate, “popped the champagne” in 2017 when Bitcoin fees exceeded the block reward.

In 2023 it will be 2017 all over again. But this time, many Bitcoiners who were once staunch opponents of the idea that fees should be low have changed their minds.

Ironically, the culprit is Bitcoin’s Taproot upgrade. This (perhaps unintentionally), opened up a design space that allowed users to inscribe any content they wanted on the blockchain. The immediate catalyst behind this spike is the BRC-20 standard. It relies on a novel distribution method. BRC-20s have a “proof-of-burned fee” mechanism, where users are required to sacrifice transaction fees for the creation of new tokens. The fees have risen to astronomical levels in the short-term, pricing out conventional usage. Some Bitcoiners even took to , calling usage of the blockchain as a ” denial-of-service” or attack against El Salvador’s Bitcoin Mission.

Fee spikes are not usually permanent. History suggests that the current BRC-20 mania will fade fairly quickly. I think it’s more like the Otherside Mint on Ethereum than something lasting. It’s true that Ordinals and inscriptions have released a large amount of latent Bitcoin blockspace demand, and we are now entering a new fee regime with a structurally higher rate, even though this acute spike is expected to fade within a few days.

Bitcoin maximumist ideology is now highly reactive and technologically regressive. It’s more concerned about ideological purity than coherence

This is something I find to be a good thing. The Bitcoin blockspace from the summer of 2021 until early 2023 was a virtual wasteland. As the miner subsidy continues to decline, fees will be needed to compensate. I and other Bitcoiners have been concerned about the lack of miner revenue. It has been encouraging to see that Ordinals and Inscriptions have triggered a new demand for Bitcoin Blockspace. I think that these more creative uses of blockspace, which is otherwise neglected, could be a way to sustain Bitcoin’s block rewards.

Although I agree that high fees are price out individuals who use the Bitcoin base layer to make smaller transactions, particularly those in the global South like El Salvador and Africa, it is simply wrong to think that Bitcoin owes anybody perpetually low fees. Bitcoiners deliberately capped block space in order to make the validation process as cheap as possible (and to be as inclusive as we could, particularly for people from the global south). This means, mechanically, that fees will rise when congestion occurs. This is a unavoidable consequence of Bitcoin’s design.

The characterization that the price of blockspace is “too expensive” for a group of people who claim intellectual descent from the Austrian Tradition is incoherent. The market sets the fees, and to believe that they are too high would be to support interventionism and centralization. If you believe the blockspace price is “high”, then it is a normative opinion about what types of transactions Bitcoin is reserved for. This is not compatible with a permissionless network.

Read more: Bitcoin’s BRC-20 Explosion Sends Users Scrambling For Options, Including Lightning

Market prices are always “correct” because they reflect the collective attitudes of all participants. This logic is similar to saying oil prices should be $20/barrel to allow even the poorest members of society to afford gas. Although this stance has some populist appeal someone will always have to pay. The price of low Bitcoin fees would be an unbounded amount of block space, which is impossible from a decentralization perspective. Not to mention that fees will be the only source of revenue for miners in the long run. Bitcoiners that claim fees are “too expensive” are essentially demanding that node operators subsidize their low fees and that, over time, inflation will be perpetuated in the Bitcoin protocol.

People who are disappointed that they cannot onboard newcomers into Bitcoin have a misunderstanding of the nature and function of the network. Base layer settlements have a finite supply and can’t be expected to stay cheap forever. The settlement assurances should be tailored to the nature of the particular transaction. For example, you do not need to have a bank-wire level of assurance in order to purchase a cup of coffee or to make a $5 test payment.

If Bitcoiners who are stymied with fees have any disagreement, it should be about the speed of development of L2s within the Bitcoin space. This misconception is also not justified: A cursory glance at the data reveals that fees were over $50 per transaction in 2021 as well as 2017. It shouldn’t have been a surprise. The market will always set the price for Bitcoin blockspace. If your preferred usage mode is not priced in, then base layer Bitcoin may not be a good network for you.

It is even more puzzling why Giacomo Zucco, Francis Pouliot and other self-appointed high Priests (even though they were on the small blocker’s side in the scaling wars) have started complaining about the fees. Answer: For them, Bitcoin is divided into two categories – sacred and profane. The “outgroup”, which is generally moderate, supports Ordinals and Inscriptions. They are currently used primarily to trade NFTs or speculate on new tokens.

This is a profanity to the hardcore fundamentalists who absolutely detest the ownership of any other currency than Bitcoin. Bitcoin maximalists believe that Bitcoin should only be used to conduct monetary transactions, and not for those dealing with non-Bitcoin assets. It is their perverse framework that it is morally acceptable for North Korea use Bitcoin to evade sanctions, but not for an artist to release their NFT in the Bitcoin blockspace. This is because Bitcoin’s maximalist ideology has evolved into a highly reactive and technologically regressive ideology that prioritizes ideological purity over intellectual coherence.

As perplexing as the BRC-20 mania is, it’s one of best things to happen to Bitcoin for some time

The new fee pressure should be welcomed by the few small blocks that have been intellectually consistent since 2017 and are still doing so today. This is a catalyst to encourage the adoption of existing L2 networks, such as Lightning, or alternative L2 systems where Lightning fails. High prices, as with all commodities are the cure to high prices. In my role as a venture investor, the entrepreneurs that I have met recently who are designing novel L2s to explore alternative design space have encouraged me. Rollups are a product that has a clear market on Ethereum. I hope they will be added to Bitcoin at some point.

Lightning isn’t a panacea and is only suitable for small, frequent payments. This doesn’t meet all Bitcoin transactional demands. Wires, ACH networks, Fednow, physical money, remittances and hawala networks are just a few of the many ways to transfer dollars. These can be divided more abstractly into “push and pull” approaches, deferred settlement versus real-time settlement, and gross settlement versus net settlement. Each comes with its own set-up of trade-offs and provides different transactional speeds, as well as settlement assurances.

It is naive for Bitcoiners to believe that one scaling network can meet their diverse needs. Bitcoin’s long-term future is multi-scaling approaches. The gist, however, is a move away from the one-baselayer-settlement = one-payment model, towards a more economically dense, one-baselayer-settlement = many-payment model. It is the only way to scale. It is only this way that a system broadcast like blockchains, in which every operator must know about every transaction, will scale up to global use.

It is important to celebrate the surge of activity surrounding inscriptions, which has led to high fees. This will lead us towards a more efficient future. As perplexing as the BRC-20 mania is to some, it is one of best things to happen to Bitcoin for a long time.

Ben Schiller is the editor.