Inside the Fight Over Bitcoin’s Future

A terrific rumpus broke out in the world of Bitcoin last week, when veteran developers Gavin Andresen and Mike Hearn published Bitcoin XT, a competing version of Bitcoin Core, the open-source program that generates new bitcoins, verifies all transactions, and records them on the massive distributed ledger known as the blockchain. Andresen is Bitcoin’s most senior developer, and has been the project’s de-facto leader since 2011; Hearn is a pioneer in the development of Bitcoin wallets. According to an explanation Hearn posted on Medium, they released XT because “the decision-making process in Bitcoin Core has broken.” The real crisis, as this suggests, is less about Bitcoin’s code than about the power structure that governs it.

The dispute centers on a fast-approaching computational bottleneck. The blockchain is composed, as you might guess, of “blocks,” each consisting of a list of recent bitcoin transactions, time-stamped and verified by one of the network’s “miners”—computers that secure a block’s inclusion on the chain by solving a computational puzzle called a proof of work. The first computer to win this computational race “mines” a reward of twenty-five bitcoins, and then competition recommences for the next block.

Satoshi

Originally appeared at: http://www.newyorker.com/business/currency/inside-the-fight-over-bitcoins-future