Chances are that you may have noticed Bitcoin’s recent value drop this week, which may be fuelled by the currency’s power struggle that has been going on for a while.
To put things better into perspective, the recent value drop is directly related to the block size debate, which has been going on for more than two years. With this in mind, the main players in the digital currency industry are debating the right way to scale the network, in order to help it accommodate more transactions, as bitcoin continues to grow, and be adopted by many more people and companies. At this moment in tie, the block data cap is of 1 MB, roughly every 10 minutes. Some people want to raise this limit, under what has been referred to as Bitcoin Unlimited, to a flexible cap that would allow more transactions to be carried out for each block in particular. At the other side of the spectrum, we have the developers behind Bitcoin Core, who want to go ahead and keep the 1 MB limit, yet attempt to make the system a bit more efficient, hence also processing more transactions per each block. While the scope behind each end of the debate seems noble, the side effects for both decisions can be quite dangerous, as they both can transform bitcoin to either digital gold, or electronic cash, as mentioned by Adam White.
The philosophical disagreement has unfortunately managed to become a power struggle, which is horrible news for the bitcoin community. In case of a hard fork, the bitcoin network would be split into two separate parts, thus considerably reducing its power, and eliminating many of the benefits that made bitcoin so popular in the first place.
Understanding between the developers and miners should be ensured at all times, regardless of the lack of trust between the two entities. At the core of bitcoin, we have the developers which make the most important decisions, most of whom want to see bitcoin controlled by one or a few entities (either the government or miners). Regardless of this aspect, without miners, the bitcoin network would most likely die, and fall apart, as it would be run by an oligopoly.
The block size debate has led to numerous price crashes in the past, and will surely have a negative influence in the future if consensus is not reached. Companies, such as Circle, have already decided to begin warning customers to use caution when dealing with the digital currency, as a hard fork will likely have a strong impact on its value. In a recent press statement, the folks behind Circle mentioned that: ‘The only way to avoid the potential negative consequences of a bitcoin fork is to not hold bitcoin’. While some think that this measure is a bit too much for what we’re currently dealing with, keeping an eye on the market and on the latest developments is a must for anyone holding any amount of bitcoin.
Based on everything that has been outlined so far, what do you think about the latest developments surrounding the bitcoin block size debate? Let us know your thoughts in the comment section below.