Just some spit-balling here, I'm sure I have some ordering and details wrong.
I am going to correct some of the things you said here, in the interest of truth.
Mike and Gavin argue for no limits and ~free transactions forever, regardless of the costs.
I think that you might be lying here, since I think you should know better, though please supply a source where Gavin definitively states his support for free transactions forever?
Some in core suggest that if we really need to show the flexibility of a blocksize increase, 2MB could probably be sold and made safe enough (with planned future improvements) if we really had to.
Even today Core has not given the community a date for a hard fork increase of the blocksize limit. This is unacceptable, and you should not expect the community to trust Core. This is why the community can fork the network themselves, if the interests of the "reference client" no longer reflect the will of the economic majority then we are certainly justified in doing so.
Gavin gets some clue and realizes no limit at all makes no sense; Mike grudgingly agrees to go along with a 20MB proposal.
Its called compromise, Core could learn from this.
Miners reject that as unrealistically large.
Because miners decide, incentives aligning their interests with those of the economic majority. Ultimatly this economic majority therefore decides, not a centralized group technocrats in charge of a implementation of Bitcoin.
Gavin and Mike retrench with a 8MB that rapidly ramps to gigabytes. Announce intent to adversarial fork the network in Bitcoin XT. A new client which is 99.99% code from Core but with the addition of the new expanded blocksize and Mike hearn declared benevolent dictator of the project.
What you describe as rapidly actually takes place over a twenty year period. It is fine to be skeptical of the schedule within BIP101 but you are dramatically exaggerating the facts with the language you choose to use.
Furthermore you fail to acknowledge that Core is also effectively a dictatorship. Every implementation of Bitcoin is arguably a dictatorship, it is the nature of open source projects. In Bitcoin the democratic will of the economic majority can be represented through the choice of multiple alternative implementations. This solves this particular problem within the governance of Bitcoin.
In spite of announced intentions by some, almost no one adopts Bitcoin XT and XT development sits at a near standstill compared to Core.
Again with the exaggeration, around ten percent of the nodes have been alternatives to Core since the launch of XT, I would not call that nothing. When Classic is released I am sure it will take away a even bigger share of nodes running Core. Not to mention the supermajority of miners now supporting Classic.
Systems testing is finally performed on XT via testnet a month before it was intended to activate. Many performance problems are found with 8MB, person testing it suggests that 4MB or 3MB initially may be more realistic.
While other tests showed that it was safe, I am not a technical expert myself but there are other technical experts beside yourself that say eight megabyte would be fine.
Core completes a years long development work which speeds signature validation >5x, invents a clean way to allow new efficiencies and security trade-offs, gets node pruning working, and comes up with a way to get roughly 2MB worth of capacity without a the risky and coordination problematic hardfork, while simultaneously fixing some long time bugs like malleability and misaligned incentives (utxo bloat).
Hard forks allow us to test consensus and serves as a check against the power of any development team. It is not something that should be avoided, it should be embraced. The work Core has done is good, besides certain details within the code discounting some transaction types in favor of lighting network developed by Blockstream. It being open source I am sure it can be adapted and adopted into another client which will scale Bitcoin to its true potential.
Core posts a capacity roadmap including these solutions, along with a plan for further development to allow more capacity into the future.
We have discussed this before, it comes down to a fundamental disagreement in terms of the vision and future of Bitcoin. For you to say that Core stands for scaling Bitcoin directly is somewhat of a misnomer, at least Peter Todd was able to acknowledge this. Core seems to want to fundamentally change the economic policy of Bitcoin. Many people do not agree with this, having signed up to the original vision of Bitcoin. Not everyone accepts off chain solutions as a way to scale Bitcoin.
Almost the entire development community and many in industry sign on an open letter in support of this plan. On the order of fifty people in all, it includes all of the most active contributors to Bitcoin Core and many other pieces of Bitcoin software.
This is a very misleading statement, especially considering that at the time three out of the five Core commiters did not even sign the road map. Gavin Andreses, Jeff Garzick and Peter Todd. Prominent developers to say the least. Not to mention the many companies that also disagree with the road map.
Gavin, Jeff, and a few other people (including people involved with the recently insolvent Crypsy exchange) announce that they're creating "Bitcoin Classic"; a retry of the XT approach but with added popular voting on a centralized web voting site.
Explain to me how is Classic a retry of XT? The answer is it is not, the only thing they have in common is that they increase the blocksize and that Gavin is involved. I think you are falsy equating these two projects.
Mike Hearn catches fire, slams Bitcoin with a one-sided attack piece piece in the NYT calling Bitcoin a failure. Some argue that Mike's position is driven by his employment at R3, an adversarial to Bitcoin company working with major banks. Astute followers know this isn't true: Mike's misalignment with Bitcoin has existed forever.
Mikes loss of believe and going off to work for R3 is unfortunate. However it is wrong to think that he was always a shill for R3 without evidence. You should know better then to throw around baseless accusations.
Bitcoin market price crashes significantly.
I have called you out on doing this before, relating these events to the markets, unless you are also an expert in markets you are just fear mongering.
Core creates a public test network for the new improvements and many people are actively testing on it. Several wallets begin their integration process for the new improvements. Development moves rapidly, several standards documents are written.
Market price substantially recovers.
You are attributing the rise in price with the work done in Core? Seriously you should know better.
Gavin finally announces code for the new "Classic", largely duplicating the XT functionality. Instead of the BIP101 rapid growth scheme, it features a 2MB hardfork, and none of the other improvements that are recently in core and in the works.
Bitcoin market price drops significantly again.
You are using peoples fear of their monetary investment in order to sway people over to your ideological side. That is manipulation, what you are doing here is propaganda.
I'm hoping we get to the point where the market realizes it's being toyed with here and repeated XT reloaded attempts are pretty meaningless. We're not seemingly there yet.
What are you even trying to say here? That all alternative implementations that want to increase the blocksize are meaningless? It sounds like you have contempt for the freedom of choice, and the very check on the power of Core. Bitcoin is freedom, and I think that you are trying to control it.
Have I basically summarized the last year? Anyone want to add any bullets?
Classic will be released soon, already having gained a supermajority support from the miners. The narrative has evolved and more people are aware of the divergence of vision and possible conflict of interest within Core. Bitcoin is freedom and I am confident that the original vision of Satoshi will triumph.
