In January 2016, fellow Bitcoin developer, Mike Hearn, dropped the bomb — Bitcoin has failed. While “failing” might be a bit overdramatic, his reasoning is far from an overstatement. Hearn explained why Bitcoin and its community has failed like so:
What was meant to be a new, decentralized form of money that lacked “systemically important institutions” and [was] “too big to fail” has become something even worse: a system completely controlled by just a handful of people. Worse still, the network is on the brink of technical collapse. The mechanisms that should have prevented this outcome have broken down, and as a result there’s no longer much reason to think Bitcoin can actually be better than the existing financial system.
What happened? Essentially, Bitcoin’s blockchain is full. An artificial capacity cap of one megabyte per block, utilized as a temporary kludge a long time ago, has not been removed and results to the network’s capacity to be almost completely exhausted.
As an effect, over 95% of Bitcoin mining hashing power is controlled by a handful of people.
But What About The Blockchain?
Bitcoin is to blockchain what currency is to money. Just because a certain currency has failed, doesn’t mean money has failed.