Bitcoin Is Dying, Says Famous Bitcoin Developer
[bold]Mike Hearn, one of Bitcoin’s core developers, has published an all-tell blog regarding the current state of the famous crypto-currency, and his conclusion is that the Bitcoin experiment is very close to failing.[/bold]
Mike does a much better job at explaining all the problems with Bitcoins, but his blog post is long. If you have 10-15 minutes to set aside, we recommend reading his blog post. If you don’t here is a short summary of what he says is currently wrong with Bitcoin.
► The Bitcoin blockchain (Bitcoin transactions database) is full and the servers cannot process more than 3 payments per second.
► More than 50% of Bitcoin network and computational power is controlled by a large group of Chinese Bitcoin miners.
► These Chinese miners are preventing an increase of the basic Bitcoin transaction block to a value bigger than 1MB, mainly due to poor Internet conditions in China, which will decrease their revenue stream.
► Coinbase, the largest US Bitcoin startup, has been removed from the Bitcoin website, after trying to increase the Bitcoin’s blockchain capacity.
► Projects (Bitcoin XT) aimed at advancing Bitcoin and the transaction capacity are actively being banned from the official Bitcoin forums.
► Companies deploying Bitcoin XT were “coincidentally” hit by DDoS attacks.
► Talking about Bitcoin XT was prohibited at conferences.
► People that never believed in Bitcoin were given full access to the crypto-currency’s source code.
► These developers cannot be removed from their positions.
► Fees per Bitcoin transactions are sometimes bigger than credit card charges.
► By not increasing the transaction block size, pressure is put on the blockchain’s resources, which indirectly keeps transaction fees up, and even growing.
► And the biggest criticism of them all: The people that currently run the Bitcoin Core are planning to allow clients the right to modify transaction details until the transaction appears in the blockchain (Bitcoin transactions database). This means that people can modify the sum or the recipient’s wallet address after a payment has been made. Since there are delays on the network (see first point), this can take up to a few hours. Customers can buy anything with Bitcoin, and after they leave the store, they can change the transaction’s details and point the money back to themselves, or modify it to zero. As Mr. Hearn puts it: “this makes using Bitcoin useless for actually buying things.”
Many people in the past criticized the Bitcoin project. This is not something new. But none of those people were of Mike’s importance. As soon as his blog post hit social media, impact was immediately felt in Bitcoin’s price, which dropped from $440 to $360.
Mike has left the Bitcoin project, has sold all his Bitcoin, and has joined R3, a company that’s developing blockchain technology for a conglomerate of banks, together with the Linux Foundation.