Bitcoin has a scale problem – it’s growing too fast for its underlying mechanism to handle. The Verge reports “The average time to confirm a transaction has ballooned from 10 minutes to 43 minutes. Users are left confused and shops that once accepted Bitcoin are dropping out.”
Here’s a Technology Review story about it.
If bitcoin had a benevolent despot in charge, this is no problem: Just increase the block size. But bitcoin’s distributed nature acts against it in this case – there’s no despot, benevolent or otherwise. The “community” is in charge, which means decisions are hard to make. Sometimes hierarchy is nice.
I don’t know what this means for the future of the most famous cryptocurrency; I assume the answer will get worked out, more slowly and messily than necessary.
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Of course this story isn’t actually true. I tested Bitcoin transactions for the last few days, and they work as promised: instant verification with settlement in 10 minutes. This story is a response to a DDOS attack on the network that caused low/no fee transactions to fail. Which is precisely how Bitcoin deals with spam… you need to pony up the 5 cents or so it takes to get a transaction done in a reasonable amount of time. And 0-confirmation risk-mitigation stuff doesn’t work without that fee either. So yeah, go ahead and buy a coffee – just pay the default 5 cent fee and it will work fine.