The rise of Bitcoin was swift and dramatic, and its fall just might be the same. The peer-to-peer virtual currency may be very popular, but it hasn’t been without its critics. In fact, in 2013 Paul Krugman, a Nobel Laureate in Economics, wrote in a New York Times article that “to be successful, money must be both a medium of exchange and a reasonably stable store of value. And it remains completely unclear why Bitcoin should be a stable store of value.” He made the comment because even then, Bitcoin was seeing a lot of fluctuations in value and actually fell from $1,200 to $600 in just two days. Despite its flaws, the currency system has retained its popularity, which is now its biggest problem. It turns out, Bitcoin’s software coding can’t actually handle its growth and it is an issue users spotted long ago.
According to The Verge, Bitcoin’s network hit capacity this week, meaning transactions that used to take 10 minutes are now taking an hour. With irritated users and stores dropping the service from their list of accepted payment, it is looking like the virtual currency system will be forced to redesign their coding. Of course, nothing is ever as simple as it seems.
The original core development team has been clashing with a new group that has designed their own version of the system, which is based on the same source code but doubles Bitcoin’s one-megabyte information allowance. Making it bigger seems like a no-brainer, but the larger size would take more computing power and end up limiting how many people (or miners) can control the system’s transaction records. As the miner network gets smaller, the less decentralized it becomes.
As long as the fighting sides can’t agree on a solution, the entire open-source Bitcoin platform will continue to be at risk.