Two sides clash in the solutions to be implemented to develop the virtual currency
Victim of its success, the bitcoin is facing a crisis of growth, which doubles as a crisis of governance. For professionals and activists of anonymous currency, the continued increase in the money supply and the number of transactions is rather good news – evidence that the cryptocurrency settles in the global financial landscape. In March 2016, 15.5 million bitcoins in circulation were worth more than $ 6 billion.
However, in its current configuration, the bitcoin network will soon saturate, which may cause congestion and service degradation.
For all players, the solution is obvious: we must introduce technical innovations that enable the network to handle more traffic. But how? On the approach to be taken, opinions differ. In recent months, has emerged two opposing camps, clashing openly.
Supporters of a quick and easy solution want to increase the size of “blocks”, these files contain transactions, in addition to the “blockchain” (block chain), the single directory of all transactions. Today, the maximum block size is 1 megabyte (MB), which can represent up to 3000 transactions. In theory, it is sufficient to pass the block size to 2MB, to solve the problem, at least temporarily.
Recently, proponents of this “easy method” have established an informal group called Bitcoin Classic. It brings particular historical developers of Bitcoin and thirty commercial companies: “minor”, which integrate new transactions to “blockchain” by solving mathematical equations and earn bitcoins for each new block and portfolio managers , exchange sites, technical service providers, etc.
Major economic challenges
Opposite, another group, composed largely of the coders from the original team Bitcoin Core ( “core”), advocates a more gradual approach and more “elegant”. According to them, instead of increasing the size of the blocks, it is better to decrease the size of each transaction.
Core are not opposed in principle to increasing the size of the blocks, but they first want to perform the necessary tests to ensure that this change will not cause any unexpected disruptions. They fear in particular that it affects the flow of traffic: in this case, large providers with broadband connections would be an advantage over their smaller less equipped competitors.
In addition, to sustainably increase network capacity, the Core wish to create “sidechains”, the “side chains” attached to the “blockchain” original, which would manage the micro-transactions. In this two-layer system, “blockchain” original serve mainly to make large transactions and clearing operations. For their part, the Classic prefer to maintain the system of “blockchain” unique. The disagreement is complete.
The fight is bitter because the technical debate cache economic issues. Eric Larchevêque, director of the security company and Ledger House official Bitcoin in Paris, which is in favor of Core, summarizes his vision: “The purpose of the bitcoin is to provide an egalitarian, decentralized monetary system peer-to-peer, which makes it very resistant to attacks and attempts at censorship by authoritarian governments – for example, at the moment, Russia. Core remained faithful to this original ideal. – The activists of free software and crypto-anarchist ”
However, according to him, the Classic have other priorities: “There are among them businessmen who want to transform the bitcoin in an unmarked and centralized payment system – as if to compete with Visa.”
Supporters of Classic counter that their solution will safeguard free competition. A historical Developer Bitcoin, Gavin Andresen says on his blog that if we let the network reach the point of saturation, it will cause a movement of concentration: “We’ll see appear highly centralized agreements between the exchange offices, miners and merchants, or even a fusion of minors and transactions creators.”
Breaking the deadlock
Similarly, Brian Armstrong, head of the Coinbase portfolio management company, with a hundred employees, accuses the Core to be unrealistic purists “They want perfect solutions rather than correct solutions. And if there is no perfect solution, they prefer inaction, even if this puts the bitcoin in danger. ”
In addition, according to him, the solution of reducing the size of transactions is very complex, and its implementation will take too long to prevent network saturation. Very offensive, he even consider creating a new team of coders to replace the Core.
Despite several conciliation meetings, the Classic and Core have not managed to agree. Eric Larchevêque notes that the bitcoin community lacks effective decision-making mechanisms: “We have no system of majority voting or conflict resolution process. The informal consensus rule is paralyzing. ”
To break the stalemate, each side has taken action unilaterally. In February, the Classic has released software that increases the block size to 2MB If adopted by 75% of stakeholders, it will impose de facto as the new standard, and will switch network.
In turn, in April, the Core will publish their own program, which will reduce the size of each transaction. Moreover, some members of the Core work to Canadian society Blockstream, technology leader of “sidechain”. Blockstream just passed a levy of $ 55 million of funds (53.5 million), which allowed the French group Axa to enter the capital.
Faced with this unprecedented conflict, Eric Larchevêque is worried: “One of the two camps will perhaps win quickly, but we can also imagine a scenario where each system would be adopted by 50% of the players. It would be chaos, breaking the network into two subsets, with uncontrollable consequences.”