Long a sort of Cold War, bitcoin's scaling debate is escalating into what may be best described as a digital Cuban Missile Crisis.

No longer open for diplomacy, users of the $40bn economic network, which hit an all-time high in value last weekend, are now in the midst of evaluating an ever-increasing array of threats from various network stakeholders, each of whom is seeking to steer discourse and development.

In yet another turn to the scaling debate, major mining firm Bitmain revealed yesterday a strategy outlining how it will respond should a controversial bitcoin code upgrade known as BIP 148 – a change the firm opposes – activate later this summer.

In a blog post, the company outlined its "contingency plan" if users attempt to force a protocol change, thereby circumventing the network's current structure in which those running its mining machines signal for upgrades.

Most notably, the proposal would dedicate mining resources to hard forking the network to a rule set with a larger block size – an upgrade that would likely result in two bitcoin networks and two tradeable bitcoin assets.

In response, the firm, long the center of bitcoin's long-running debate and often the foil to the open-source network's developers, invited the wider bitcoin community to join the effort.

Admittedly, there been many proposals that could have lead to a network split over the last few years of bitcoin's scaling debate, but none have panned out so far.

In recent weeks, action has increased, though, with groups starting to form around two scaling proposals, SegWit2x and BIP 148. Each hopes to usher in a code change known as Segregated Witness (SegWit) in a different way. But, each also has a risk of splitting bitcoin into two assets and impacting the value of the network and its users. (Although, as of this morning, it looks like the two proposals might be made compatible.)

As such, the proposals have been highly politicized, creating market uncertainty and confusion that has arguably exacerbated a diversification by investors into other digital assets.

For instance, some have gone as far as to call BIP 148's activation date bitcoin’s "Independence Day" since it pushes through a change without requesting miners to signal support for it first. Philosophically, the movement takes the argument that bitcoin's mining was never meant to be so centralized, and that those that contribute resources to securing its ledger weren't meant to have outsized control.

But, Bitmain, among others, disagrees that BIP 148's user-activated soft fork (UASF) is the best way to push through upgrades to the cryptocurrency. As have others, the group is citing public safety in its comments.

"BIP148 is very dangerous for exchanges and other business," the firm's post reads.

Elsewhere, the company has described its plan to hard fork as a way to save users from the consequences of a split once BIP 148 activates.

One potential problem with the UASF is what's known as a 'reorganization', where user transactions could later be erased from the blockchain history. This could happen if two chains persist temporarily, but then merge back into one chain, erasing transactions that occurred on the 'losing' chain.

The company goes on later to expand on its plan to hard fork (or mine on a different version of bitcoin's blockchain history) in response to the UASF in an effort to make the split more permanent.

The statement read:

Bitmain said it will kick off the hard fork, which it called a "User-Activated Hard Fork (UAHF)", about 12 hours after the UASF starts. Though, the firm plans to mine it privately for three days before it opens to other miners.

With each new twist, bitcoin's bitcoin scaling debate is growing more confusing and harder to follow. Moving quickly from proposals as diverse as SegWit, SegWit2x, UASF and now UAHF, the situation so far this year may be too complex to describe in full.

In this light, however, some believe the strength of the UAHF proposal is that it moves the market to a kind of certainty.

Cornell University computer science associate professor Emin Gün Sirer thinks that it's a good sign, at least in that parties are being "transparent" about their future plans.

"The fact that they’re being forthright about it is nice to see. From the perspective of someone who's not on either side [of the debate], this is a welcome development," he said, adding:

Others have argued similarly, noting that the proposal outlines a way to bake in safety features, including resistance to 'replay attacks' should the network split. (This was a problem in the aftermath of ethereum's split into ethereum and ethereum classic last summer).

Bitcoin Unlimited developer David Jerry Chan argued on social media that the change protects the main blockchain from a UASF.

Still other observers think that no outcome is likely and that, at the end of the day, neither side will sacrifice the network's accrued value and market leader position for a small technical shift.

As usual, though, reactions to the plan were split, generally between those that support volunteer developer group Bitcoin Core’s technical roadmap and those who don't.

SatoshiLabs CEO Marek Palatinus, the company behind mining pool Slush Pool, reported that the company has been "monitoring" the debate, but "the situation is getting really foggy".

He argued that he interpreted the blog post to mean that Bitmain will mine a private blockchain that would be governed by the company.

He told CoinDesk in an email:

Along these lines, Henry Brade, CEO of European cryptocurrency trading platform Prasos, added that he thinks bitcoin users are resistant to the idea of miners controlling the rules of the network.

While he believes miners play a "crucial" role for bitcoin, he said that Bitmain's new roadmap is a sign that the company is trying to dictate the rules of what is supposed to be a "decentralized" online currency.

"It's good that Bitmain released this 'plan' though, because it shows everyone that what they really want is complete control over bitcoin," Blockstream CSO Samson Mow said, putting the same idea in a different way.

Others, such as pseudonymous developer Alphonse Pace, argued that the hard fork is a "complete bluff", adding to the idea that this is merely an escalation of claims.

"They make no details about how much hash power to commit to it. It may be so insignificant that it has virtually no blocks, and they won't even publicly show what they are mining because it probably will be embarrassingly small," the developer said.

Still, some are taking the event as a sign that the 1st August UASF is working as it's supposed to.

Brade, who favors the UASF, told CoinDesk that he's "very optimistic" about this turn of events, arguing that Bitmain would ignore the UASF if they thought it would not work.

"It's a sign that Bitmain actually thinks the UASF community plan is legit. They are worried that it's going to happen. Apparently they don’t like it," he said.

Further, he believes it will further push users towards a UASF, an upgrading mechanism that he favors.

He added:

Indeed, to some, the appeal of a UASF is that it has more of a psychological effect. Pseudonymous developer Shaolinfry, who popularized the idea of a UASF a couple of months ago, argued that the threat of a UASF is what led mining pools to ultimately support SegWit on litecoin, for example.

Further, despite Bitmain arguing that a reorganization is a reason to split off into another chain, others have claimed that safety is the key reason they will upgrade to BIP 148. That way, a user's bitcoins are less likely to disappear in the event of a split.

Either way, this uncertainty (to which Sirer alluded) is a reason why some developers argue that bitcoin companies and users should put a pause on bitcoin transactions at around this time to stay safe.

For one, while 30 or so firms have pledged support for the UASF, the big players that such an upgrading mechanism is contingent on (eg exchanges like Coinbase and Kraken) have not.

After the hard fork, Bitmain also outlined a farther-looking technical plan for the resulting blockchain if its upgrade works as planned.

The company said that three bitcoin developer groups are working on the UAHF code, which will be ready by 1st July. Long-term plans are to eventually add the scaling optimization SegWit, an RSK sidechain that would port ethereum-style smart contracts to bitcoin, extension blocks, the scalable protocol Bitcoin-NG and other features.

All that said, the company said that it still supports SegWit2x, a recent scaling 'agreement' that boasts the support of most major bitcoin companies and groups that control more than 80% of the mining power. As with the hard fork, response to the roadmap was mixed.

For one, some of the included technologies might be incompatible with what developers are working on right now.

Lightning Labs co-founder Elizabeth Stark noted that the technology Lumino is not compatible with Lightning Network. Developers of several different versions of the transaction-boosting software drew up standards last October so that all of them would work together.

Still, others are hopeful about the company's long-term roadmap.

Sirer said that he wasn't surprised to see that Bitcoin-NG, a potentially more scalable version of the protocol that he co-architected with other researchers at Cornell University, was included.

"It shows that they're not just kicking the can down the road. Instead they have a medium to long-term vision for how to really address the scalability problem," he said.

Still, there are signs that the debate, despite its diversity of proposals, is getting more and more dictated by emotion.

In comments, Haipo Yang, CEO of bitcoin mining pool ViaBTC, for example, continued to voice his support for Bitmain and its proposal on the basis that it might eliminate network congestion and fees.

At play, however, is a complexity of underlying ideas and motives.

Yang, for instance, believes high fees are forcing away potential users (not showcasing that demand is escalating and growing), that developers are seeking too much control (despite largely still backing the same proposal for months), that users should be able to choose from multiple clients (though they technically can and aren't) and that a split into two networks is better for all involved (though that might affect the value of users' funds).

On these issues (and more), there are arguments to take on either side.

But, in this jockeying for control, the migration of investor funds into alternative protocols may prove to be adding pressures to what some are calling a 'power struggle'.

Finally exasperated by the questioning, Yang concluded:

"I don't know which side [will] win. [A] split to two bitcoin is better, I think."

The question now may be whether this market change will force action, and if it does, whether users will be caught in any fallout.

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which helped organize the SegWit2x proposal and has an ownership stake in Blockstream. 

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