Bitcoin is a failed experiment, says major Bitcoin developer
The cryptocurrency “has failed” and its network is “on the brink of technical collapse,” according to one person who’s been trying to save it.
Fissures in the Bitcoin community appear to be turning to chasms, with one prominent developer abandoning the cryptocurrency for good.
Mike Hearn, a longtime developer who often speaks about Bitcoin to the press and in presentations, wrote on Medium that he’s sold all his coins and will no longer participate in development.
“What was meant to be a new, decentralised form of money that lacked ‘systemically important institutions’ and ‘too big to fail’ has become something even worse: a system completely controlled by just a handful of people,” Hearn wrote. “Worse still, the network is on the brink of technical collapse. The mechanisms that should have prevented this outcome have broken down, and as a result there’s no longer much reason to think Bitcoin can actually be better than the existing financial system.”
Why this matters: Bitcoin’s proponents have long hoped that it would revolutionize the world’s financial system, breaking down geographic barriers and allowing users to conduct transactions anonymously. But lately, the effort has been set back by drama and infighting among its developers. Hearn’s summary of the state of Bitcoin is well worth reading, though it’s worth noting that he’s not an unbiased source.
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Keep in mind that Hearn himself has played a central role in the recent controversy. Last August, Hearn and Gavin Andresen, chief scientist at the Bitcoin Foundation, created a forked version of the cryptocurrency called Bitcoin XT. The goal of Bitcoin XT is to expand the size of the “blocks” that process transactions, allowing for speedier purchases and increasing Bitcoin’s mainstream appeal.
Hearn has argued that a small number of miners—largely concentrated in China—were preventing an expansion in Bitcoin’s block size due to selfish reasons, and Bitcoin XT would effectively serve as a vote for larger blocks. However, some in the Bitcoin community saw XT as little more than a coup, and that the split was bad for the currency as a whole.
In any case, Hearn notes how the atmosphere turned ugly after Bitcoin XT’s creation. Bitcoin forum moderators began banning any mention of XT, and moved to delist the Bitcoin wallet service Coinbase from Bitcoin.org for backing the fork. Bitcoin XT users have also suffered massive denial-of-service attacks, Hearn says.
Today, Bitcoin XT accounts for 9.4 percent of Bitcoin nodes, according to a site that tracks it. That’s down from 14 percent soon after the fork launched. It seems the bad blood surrounding the fork, combined with the community’s inability to improve the core version of Bitcoin, has led Hearn to give up.
“Previous crises, like the bankruptcy of Mt Gox, were all to do with the services and companies that sprung up around the ecosystem,” Hearn wrote. “But this one is different: it is a crisis of the core system, the block chain itself.”