Bitcoin is in crisis; Bitcoin is thriving. More people than ever are using the cryptocurrency but as adoption grows the network that it relies upon is running out of spare capacity. Developers fear that within less than a year, the whole thing could grind to a halt. If nothing is done, bitcoin's own success may end up breaking it.
The debate surrounding how best to address this issue has the community divided, with some even going as far as to blame it for the recent Bitcoin price crash. On Tuesday the price of Bitcoin fell below $200 (£129) for the first time in six months, as uncertainty surrounding the cryptocurrency's future continued.
The main point of contention relates to the size of bitcoin's blocks – a term used to describe the batches of confirmed transactions shared on bitcoin's public ledger, the blockchain. The block size was originally 1MB to prevent spam and, according to Bitcoin's pseudonymous creator Satoshi Nakamoto, "keep it small so new users can get going faster".
Nakamoto never meant for this size to be permanent and expected for it to be increased as Bitcoin grew. According to TradeBlock, the amount of transaction data being carried by blocks has grown from 125KB to 425KB since 2013. At its current growth rate, the limit of the current system will be reached at some point next year. If another bubble or media frenzy occurs, it could even happen by the end of this year.
Despite the apparent need, the idea of increasing block sizes has proved controversial in some quarters, mainly due to a lack of consensus on how best to do it. Renowned cryptographer Nick Szabo, who some have credited with being bitcoin's anonymous creator Satoshi Nakamoto, recently tweeted an image of a space shuttle exploding into two pieces, together with the caption: "What happens when the managers and investors ignore the engineers and scientists."
Some of the world's largest cryptocurrency companies got behind proposals to raise the maximum block size this week through the implementation of BIP101 – a proposal put forward earlier this year by Gavin Andresen, the chief scientist at the Bitcoin Foundation.
"Our community stands at a crossroads," reads an open letter signed by chief executive officers from BitPay, Blockchain.info, Circle, Kncminer, Xapo and itBit. "After lengthy conversations with core developers, miners, our own technical teams, and other industry participants, we believe it is imperative that we plan for success by raising the maximum block size."
The companies claim that they will be ready for the implementation of 8MB blocks by December 2015. Andresen and fellow developer Mike Hearn hope to do this through the Bitcoin XT client that they developed to supplant Bitcoin Core as the network's chief client. It is feared that the more centralised nature of this system will undermine the currency and potentially cause an irreversible split in the cryptocurrency community as the different camps pick opposing sides.
In a recent email to developers working on Bitcoin XT, Hearn stressed that the Bitcoin XT fork is essential if the bitcoin is to have a future. "I feel sad that it's come to this, but there is no other way," Hearn said in the email. "The Bitcoin Core project has drifted so far from the principles myself and many others feel are important that a fork is the only way to fix things."
Hearn also wrote a "manifesto" to describe the differences to Bitcoin Core and explain why he believes the proposed fork is necessary. He suggested that one of the biggest reasons for resistance to Bitcoin XT is a lack of communication.
The objections to Bitcoin XT are numerous, though developers claim that many of those in opposition are doing so for personal gain. A comprehensive list of objections against raising the block size was compiled by Andresen in a blogpost in May, ranging from a less secure network, to confidence in bitcoin being destroyed.
One of the most vocal opponents to Bitcoin XT is Anthem Blanchard, CEO of gold and silver broker Anthem Vault. Blanchard believes the proposed fork sets a "dangerous precedent" of a lack of consensus amongst the core Bitcoin developers.
Blanchard told IBTimes UK: "One of the primary Bitcoin XT programmer advocates is known for advocating a change to the code in March 2013 that almost took down Bitcoin before other programmers committed changes to fix the near critical issue.
"I am personally of the opinion that if Bitcoin XT is adopted it will naturally result in much less utility of bitcoin being needed from a mining fee standpoint... and thus would likely result in a much lower price upon adoption."
Other opponents include bitcoin wallet services CoinKite and GreenAddress, as well as Chinese miners – who account for 50% of the network's hashing power – due to fears surrounding the country's limited bandwidth.
The Bitcoin Foundation – the organisation that lobbies on behalf of the digital currency – has so far remained neutral on the blocksize debate, however, the organisation's director, Bruce Fenton, is optimistic that a solution will eventually be found.
"The debate on the best way to implement what's necessary still isn't settled," Fenton told IBTimes UK. "The debate may seem a bit damaging for those who don't really understand how this works but I am not worried. The debate will be settled and Bitcoin will move forward."
Despite this optimism, until a broader consensus is achieved, Bitcoin's future remains in the balance.