bloombergview.com / Justin Fox / AUG 19, 2015 3:21 PM EDT
We are now in Day 5 of the Post-Bitcoin-Fork Era, and the Earth is still orbiting around the sun. Bitcoins are still being mined and traded, too, although the price in dollars is down this week. We will all be OK, I think. Although there is at least a chance that bitcoin won’t be.
Since Sunday there have been two versions of the cryptocurrency making the rounds: Bitcoin Core, which is just what it sounds like it is, and Bitcoin XT, which sounds alarmingly like a Microsoft upgrade but is basically just Bitcoin Core with some added transaction-processing capacity.
Transaction-processing capacity is important because bitcoin’s blockchain system, which currently maxes out at about seven transactions a second, is going to have to get a lot faster if it’s going to compete with the Visas and MasterCards of the world. It could run up against that limit as soon as next year unless something is done.
The simplest way to increase capacity is to let the blocks of bitcoin transactions that are verified on volunteers’ computers around the world get bigger — they’re currently limited to one megabyte. Technically this isn’t hard, but it is a more-than-superficial change that would push the bitcoin ecosystem of mining coins and verifying transactions at least a little bit more in the direction of concentration and centralization.