Bitcoin mining pools have, as expected, demonstrated their opposition to Bitcoin XT through their ‘tagging’ of mined blocks.
Miners have begun expressing their views through tagging amid fierce debate on Bitcoin’s block size. The issue escalated when core developers Gavin Andresen and Mike Hearn spearheaded the creation of Bitcoin XT, a potential fork from the original Bitcoin Core. Implemented as BIP (Bitcoin Improvement Proposal) 101, it would increase the block size limit from 1 MB to 8 MB early next year, and double the limit every two years thereafter. 75% of the Bitcoin mining network’s hashing power would have to agree to the change for it to take effect.
Thus far, only one mining pool, Slush, representing roughly 1% of the total hash rate, has come out in favor of BIP 101. And even they have since stopped broadcasting this view in their mined blocks. According to data on Blocktrail, the other 99% favor other approaches.
40.7% prefer the status quo (1 MB blocks). 35.5% have voted for BIP 100, a proposal by core developer Jeff Garzik that calls for a dynamic block size change as calculated by miners. He argues that the iteration “improves bitcoin’s governance by removing a hardcoded policy control from the software.” He opposes the hard increases proposed by BIP 101, citing the concerns of China-based miners who may be at a disadvantage relative to their Western counterparts. An environment that allows all to equally participate in mining is a more fair and decentralized approach, he argues.
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Also, the size of miner fees is inversely proportional to block size. Larger blocks allow more room for transactions to get processed sooner without having to pay for priority.
The remaining 23.9% of hashing power expressed support for an increase to 8 MB, but not via BIP 101.
In contrast, several of the leading Bitcoin wallet and service providers have come out in strong support for BIP 101. 15% of Bitcoin nodes now support Bitcoin XT.
Essentially, the question boils down to the interests of miners versus the transacting participants who are effectively hiring them.