Bitcoin is in trouble; it has become a well-known fact by now. Be it the recent post by Brian Armstrong, the CEO and founder of Coinbase where he explains his take on the happenings at the Satoshi Roundtable conference held late last month.
Now the CEO of Blockchain, Peter Smith has also explained the stuff that went on at the event. Both the versions paint a grim picture of Bitcoin’s future. The supposedly decentralized cryptocurrency, bitcoin is apparent as centralized as it can get at the development level. The Bitcoin Core developers in their hopes to create a perfect monetary system are killing bitcoin by going against its very principle.
The ongoing block size debate is nowhere close to being resolved. The main “Bitcoin Community” comprising of Bitcoin Core developers, bitcoin companies, miners, wallet and exchange service providers are still standing their ground, unyielding and leading the whole process to a standstill. There have been multiple proposals floated around so far, and none of them reached the consensus required for implementation.
While they drag things along, the whole Bitcoin network is edging towards oblivion. The effects of stagnation in Bitcoin development is now becoming increasingly visible. Recent events in the past few days are a classic example of where this is leading to. Peter Smith explains that the recent overloading incident experienced by the Bitcoin network is not due to the spam transactions as reported across the social media and news publications. According to him, the reported spam transactions originating from that particular wallet made up to less than one percent of the total bitcoin transactions processed by the network. Most of the transactions on the blockchain were genuine and they were made between bitcoin wallets and exchanges.
Increased traffic on the blockchain has created transaction backlog, leading to an increase in the average mining fee for transactions to be processed. Bitcoin users are currently paying more for less now in order to execute their transactions. The recent increase in the number of bitcoin transactions from individual wallets to bitcoin exchanges can be attributed to early stage capital flight. The impending problems with bitcoin, if adequate steps towards scalability are not taken have reduced the confidence on bitcoin among people and they are preparing to liquidate their digital assets. This presents a grim outlook for bitcoin.
Considering the developing situation in the bitcoin ecosystem, Peter Smith urges Bitcoin developers to introduce changes towards sustainability of the platform without waiting for a perfect solution. Peter Smith is also pushing for the adoption of Bitcoin Classic, at least for the time being, to keep the Bitcoin network alive.
It is high time for the development community to start focusing on immediate small wins by fixing things that need immediate attention instead of waiting for a fix-all solution. Bitcoin was created as a peer-to-peer fund transfer solution and not a payment settlement system as the current Bitcoin Core development team is trying to portray it. Guess, we just have to wait a bit to see if bitcoin is going to pick itself up or go down without giving a fight.