Bitcoin schism: How Bitcoin became a victim of its own success

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Bitcoin is in crisis; Bitcoin is thriving. More people than ever are using the cryptocurrency but as adoption grows the network that it relies upon is running out of spare capacity. Developers fear that within less than a year, the whole thing could grind to a halt. If nothing is done, bitcoin’s own success may end up breaking it.

The debate surrounding how best to address this issue has the community divided, with some even going as far as to blame it for the recent Bitcoin price crash. On Tuesday the price of Bitcoin fell below $200 (£129) for the first time in six months, as uncertainty surrounding the cryptocurrency’s future continued.

The main point of contention relates to the size of bitcoin’s blocks – a term used to describe the batches of confirmed transactions shared on bitcoin’s public ledger, the blockchain. The block size was originally 1MB to prevent spam and, according to Bitcoin’s pseudonymous creator Satoshi Nakamoto, “keep it small so new users can get going faster”.

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Nakamoto never meant for this size to be permanent and expected for it to be increased as Bitcoin grew. According to TradeBlock, the amount of transaction data being carried by blocks has grown from 125KB to 425KB since 2013. At its current growth rate, the limit of the current system will be reached at some point next year. If another bubble or media frenzy occurs, it could even happen by the end of this year.

Despite the apparent need, the idea of increasing block sizes has proved controversial in some quarters, mainly due to a lack of consensus on how best to do it. Renowned cryptographer Nick Szabo,

Originally appeared at: https://uk.news.yahoo.com/bitcoin-schism-bitcoin-became-victim-153029394.html