Bitcoin Civil War:
A civil war is going to take place in Bitcoin world, it is putting the future of red-hot digital currency in question. Bitcoin is high over 250 percent since last year, but its price has experienced big swings in the past few months. The CEO of BitMex, Arthur Hayes, he thinks the recent instability in the price of Bitcoin reflects the doubt surrounding the outcome of this war, that would decide on 1st of August when crypto-power dealers determine how the technology will structure that influence the currency.
The Main Story:
The current Bitcoin battle relates to the design of digital currency. According to Bitcoin campaigner Paul McNeal, the blockchain network of Bitcoin can only process so much data at a time. In technical language, the blocks which transfer the information in the chain are restricted in their size to 1MB.
McNeal says this was done for the purpose to protect the blockchain network from the hackers and some other cyber security threats. As the number of digital currency users has increased, so it takes more time for transactions to process. According to Morgan Stanley, Bitcoin transaction has made more expensive because of this, which is one of the main reasons that why merchants have not been so active to accept Bitcoin as a form of payment. Consumers have limited places for their Bitcoin to spend and it shows that merchants don’t have a sufficient number of consumers to make it worth, to invest the energy, and the capital to understand and accept.
The Battle Line:
The size issue of blockchain has drawn a battle line between the two main camps. On the one side, you have people which are mostly miners, who think that the size of blocks should increase because it will be economically profitable to do so. The other are those people who want to maintain the size of the blocks, safety, and security of the network.
People who want to maintain the block’s size are the core developers. They maintain the code and also responsible for apply changes when necessary for future innovation, according to McNeal. By this job, they keep the blockchain stable.
The view to increasing size of the blocks more than the current 1MB cap will be a risk to the whole networks. For this purpose, they’ve come up with another solution to the problem called as SegWit. Some core developers are trying to move the activity on Bitcoin blockchain to an external network.
Bloom berg wrote that moving data from the blockchain successfully diminish the inspiration of the miners, people who are basically from China, and the people who have invested millions in huge server farms.
According to McNeal to find a middle ground for all of them, some miners and business executive have created a proposal, called as SegWit2X, that would change the threshold for applying SegWit down to 80 percent and also it allows for a small increment in the size of blocks in the chain to 2MB.
Fundamentals on the both sides of the dispute are in their positions. This may finally lead to a split in Bitcoin world, thereby making more than one Bitcoin currency.