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  • Bitcoin, the cryptic currency which was supposed to disrupt the banking system,

  • is facing an existential crisis.

  • Everyone told you that Bitcion was an indestructible payment system,

  • but, it may be flawed.

  • It was designed to be limited to 21 million coins,

  • and so that no single institution could control the bitcoin network.

  • But now, if it's to save itself, it may need some decisive leadership.

  • As it stands, Bitcion operates through shared public ledger,

  • called the blockchain.

  • Think of this as a type of library, but one held in every computer in the network.

  • Within that library, every book represents a day's block,

  • limited in size, usually full of transactions.

  • Importantly, only those who solve a specific mathematical puzzle,

  • one derived from all the books already in the library,

  • have permission to add a new book onto the shelves.

  • These puzzle-solvers are called miners,

  • and they get a reward every time they add a new entry.

  • Until now, this has been that primary source of revenue.

  • Problem is, there are now more transactions than space in these blocks, or "books."

  • If Bitcoin gets more popular,

  • this could impose a speed limit on how quickly transactions can be processed,

  • and means miners will have to charge more for priority access.

  • To scale effectively, even new third parties would have to be introduced

  • to process transactions outside the Blockchain,

  • or the limits will have to be removed, allowing for ever bigger blocks.

  • Over the next few months, miners will vote on which software update to implement.

  • Option A, Bitcoin Core.

  • Or option B, Bitcoin Unlimited.

  • If it's ever going to be business-friendly, then this political flaw, needs to be resolved.

  • What happens next is anyone's guess.

  • All we know is that billions of dollars of Bitcoin value could be at stake,

  • in the event there is no decisive agreement.

Bitcoin, the cryptic currency which was supposed to disrupt the banking system,

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B1 UK blockchain library decisive existential stake puzzle

Bitcoin’s Existential Crisis: making a decision with billions at stake

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    Jerry posted on 2017/07/24
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