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**June 22, 2015 | 11 years ago today**

# Gavin Andresen Publishes BIP 101

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On June 22, 2015, the man Satoshi Nakamoto chose to lead Bitcoin published a proposal that split the community down the middle. It never activated. The argument it started never ended.

## Who Gavin Andresen Was

Andresen's position in Bitcoin was unique. Satoshi personally handed him stewardship of the project before disappearing in 2010, making him the first person outside Satoshi with commit access to Bitcoin's codebase. When Andresen spoke, it carried more weight than any other developer's opinion. When he formally proposed changing Bitcoin's block size limit, it wasn't a fringe idea from the community. It was the de facto leader of Bitcoin development declaring that the status quo was wrong.

## The Problem He Was Trying to Solve

By mid-2015, Bitcoin blocks were regularly hitting the 1MB limit. TradeBlock estimated blocks were reaching capacity at least four times daily, and fees were climbing. Andresen had been arguing publicly for months that the limit needed to go. On June 22, he formalized it as BIP 101.

The proposal was straightforward in concept: replace the fixed 1MB limit with one that grew mathematically over time. Start at 8MB in January 2016, then double every two years for twenty years, reaching 8,192MB by 2036. The doubling schedule was explicitly modeled on long-term trends in CPU power, storage, and bandwidth — the assumption being that what seemed large today would be routine in two years.

## The Chinese Miners Detail

The initial proposal called for 20MB, not 8MB. Andresen reduced it to 8MB after consulting Chinese mining pools about their bandwidth constraints, specifically the effect of the Great Firewall of China on data speeds. This detail matters: he was building consensus with miners rather than with the developers who maintained Bitcoin Core. The two groups he needed to convince were already operating in different conversations.

## How Core Responded

Bitcoin Core developers were unmoved. A note attached to the GitHub pull request for BIP 101 stated plainly that there was "a near zero chance of this getting merged." The two camps were talking past each other: one side saw a technical emergency that would strangle Bitcoin's growth, the other saw a hard fork change too risky and too irreversible to rush.

## Bitcoin XT

Rather than wait for a consensus that wasn't coming, Andresen and Mike Hearn implemented BIP 101 in Bitcoin XT, a fork of Bitcoin Core, which went live on August 15, 2015. The activation condition: 75% of the last 1,000 mined blocks must signal support. That threshold was never reached. Bitcoin XT peaked, then collapsed. BIP 101 was eventually removed from it entirely.

## Two Years of Civil War

What followed was two years of escalating conflict. Bitcoin Classic. Bitcoin Unlimited. SegWit2x. One by one, proposals to raise the block size either failed to activate or collapsed before launch. Each attempt deepened the fracture. The debate never resolved, it just changed form.

The one attempt that produced a permanent split was Bitcoin Cash in August 2017. A portion of the community that had been arguing for larger blocks since 2015 forked away rather than accept SegWit, taking BIP 101's core argument with them.

## Andresen's Fall

Andresen did not emerge from the block size wars intact. In May 2016, while the debate still raged, he publicly endorsed Craig Wright as Satoshi Nakamoto. The Bitcoin community rejected the claim unanimously. Shortly after, his commit access to Bitcoin Core was revoked. The man Satoshi had chosen to lead Bitcoin ended up outside the project he had stewarded for six years.

## Where Things Stand

BIP 101 is listed as Closed on GitHub. The base block size Andresen tried to raise still stands. Bitcoin's answer to the scaling question turned out to be SegWit in 2017 and the Lightning Network built on top — scaling upward rather than outward, without the hard fork and without the centralization risks that larger blocks would have introduced.

***

*Primary sources:* [*BIP 101*](https://github.com/bitcoin/bips/blob/master/bip-0101.mediawiki) *|* [*Bitcoin Core pull request #6341*](https://github.com/bitcoin/bitcoin/pull/6341)

*Part of an ongoing series on Bitcoin history. This event falls on June 22, 2015.*

Daily Bitcoin Lore - Gavin Andresen Publishes BIP 101

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**June 21, 2019 | 7 years ago today**

# FATF Extends the Travel Rule to Bitcoin

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On June 21, 2019, the Financial Action Task Force extended its Travel Rule to crypto exchanges. The biggest gap it left is exactly where Bitcoin's original promise still lives.

## What Is FATF?

The Financial Action Task Force is an intergovernmental body founded in 1989 to set global anti-money laundering standards. Its 39 member countries plus the EU aren't legally bound by its recommendations, but countries that ignore them risk being cut off from the global banking system. In practice, they comply. FATF is effectively the world's financial rulemaker by consensus.

## The Travel Rule Predates Bitcoin by 13 Years

The Travel Rule dates to 1996, when FinCEN introduced it for US banks under the Bank Secrecy Act. The core idea is straightforward: when money moves between financial institutions, identifying details of both the sender and the recipient must travel with it. Banks have transmitted this data alongside wire transfers for nearly three decades through SWIFT, the interbank messaging network built in 1973.

On June 21, 2019, FATF extended that same requirement to Virtual Asset Service Providers: exchanges, custodial wallet providers, and other businesses handling crypto. For transfers above $1,000, these businesses now had to collect and transmit full sender and recipient information to the counterpart exchange on the other side of the transaction.

## The Tension With Bitcoin's Design

The conflict with Bitcoin's architecture is direct. Satoshi built a system specifically for peer-to-peer electronic cash transactions without trusted third parties and without requiring identity disclosure. The Travel Rule does not apply to self-hosted wallets or direct on-chain transfers between individuals. It only reaches regulated exchanges.

That boundary matters. FATF can require exchanges to behave like banks. It cannot require individuals to do the same, at least not through this mechanism.

## The Sunrise Problem

That gap between compliant and non-compliant jurisdictions immediately created what the industry came to call the "sunrise problem." Countries implemented the rule at different times, meaning exchanges in compliant jurisdictions had to collect sender and recipient information they had nowhere to send. Counterpart exchanges in other countries had no systems to receive it. Complying unilaterally was largely pointless.

The technical challenge turned out to be significant in its own right. Banks transmit wire data through SWIFT, a network running since 1973 and wired into the global financial system. Crypto exchanges had nothing equivalent. An entire compliance industry had to be built from scratch: new messaging protocols, new counterparty verification systems, new data standards. Notabene, Sygna, TRP, and others emerged to fill the gap.

## Five Years Later: 75% Non-Compliant

Despite six years of effort since adoption, FATF's own July 2024 report found that 75% of jurisdictions were still only partially compliant or non-compliant. The gap between setting a global standard and implementing it across thousands of exchanges in more than 100 countries proved far larger than anticipated.

## The EU Went Furthest

The EU moved most decisively. Its Transfer of Funds Regulation went live on December 30, 2024, requiring full Travel Rule compliance on every crypto transfer between exchanges, with no minimum threshold. Every transaction, every time, full KYC data on both sides. The EU also defined the rule broadly enough to cover stablecoins and most tokenized assets, not just Bitcoin.

## What the Rule Can't Reach

Self-hosted wallets remain outside the Travel Rule's reach. The rule applies to exchanges and custodial providers, not to individuals controlling their own private keys. A person sending Bitcoin directly from their own wallet to another person's wallet on-chain has no VASP in the middle to collect and transmit data.

That gap is not an oversight. It is the boundary where the financial system's ability to impose wire transfer logic onto Bitcoin runs out. Whether regulators eventually find a way to extend requirements to self-hosted wallets, or whether that proves impossible as a practical matter, is one of the more consequential open questions in Bitcoin policy.

For now, the original design holds at that boundary: two parties transacting directly, without a trusted third party in between.

Daily BTC Lore - FATF Extends Travel Rule to Bitcoin

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