The Greek debt crisis, heightened by the country’s IMF default and the “No” vote on austerity, has led to money flows to bitcoin. Capital controls have been put in place in the country, which means that banks and the stock market are closed, leaving Greeks with not much alternatives when it comes to moving money around.
Several sites offering bitcoin loans and investments, as well as some buying Greek products in exchange for bitcoin, have tried to keep the economy going. However, the rise in transaction volumes over the past days have exposed the weaknesses of the bitcoin network.
Bitcoin Network Weaknesses
As of this writing, bitcoin transactions have been taking as much as five times longer than usual to complete. This underscores the ongoing debate in increasing the blockchain maximum block size limit in order to allow the network to process more transactions at a time.
Apart from that, Gil Luria, an analyst at Wedbush Securities, pointed out that the system for authorizing and approving transactions within the bitcoin network has been functioning incorrectly. This issue came from a new version of the bitcoin software that has been running on most computers not being in sync with the older version running on other miners.
Luria also mentioned that this isn’t the first time that this kind of problem came up, as the decentralized nature of the bitcoin ecosystem makes it difficult to coordinate software updates across the network. In previous instances, the system favored the software that has been running on majority of the computers. “But I don’t know that it’s happened to this extent, because bitcoin has never been this big,” Luria shared.
“This is a test of a decentralized network,” Luria added. “Every time Bitcoin passes one of these tests, it gets stronger.” However, if the issue isn’t resolved within a week, the cryptocurrency could have a crisis of its own.