Bitcoin’s nightmare has come true

Editor's note: The author of this article, Ben Popper, is an editor at technology media The Verge. He has written many articles about drones and has established a certain reputation in this field.

Over the past year and a half, many prominent voices in the bitcoin community have warned of the need for a fundamental overhaul of its core software code to stave off the impact of growing bitcoin transaction volume. However, there has been widespread disagreement within the community over how to solve the problem, or whether it will actually happen.

This week, that dire prediction came true. The network reached capacity, causing massive delays to transactions around the world and even the complete failure of some transactions. The average time it takes for a transaction to be confirmed jumped from 10 minutes to 43 minutes. Users were confused, and merchants who once accepted Bitcoin were gradually withdrawing.

Bitcoin transactions are confirmed every time a "miner" creates a new block on the network chain. Each block takes about 10 minutes to form and can hold 1MB of information. Currently, there are transactions larger than 1MB that need to be confirmed in that time period. To solve this bottleneck, many in the Bitcoin community have called for the block size to be increased to 2MB.

It sounds simple, but it has proven to be a highly contentious issue that has divided the bitcoin community into two camps: Bitcoin Core, which manages bitcoin’s original codebase, and Bitcoin Classic, which has launched its own version of the open source code with a program to increase the block size.

Two major camps compete for users and miners

Anyone can vote for their favorite programs by running a Bitcoin node that runs the software. However, the computing power of "miners" will determine who is the winner, similar to the voting in the US presidential election. China is the largest concentration of miners, who represent the backbone of "mining", and many of them currently support Bitcoin Core.

Over the past few days, both sides have accused each other of using aggressive dirty tricks. The Bitcoin Core team said the network was congested because Bitcoin Classic supporters flooded it with low-fee transactions that "miners" would not accept. Bitcoin Classic, on the other hand, said that when users tried to run nodes or mining pools with their software, they would be subjected to distributed denial of service attacks (DDoS), which weakened its network service capabilities.

Many in the U.S. bitcoin community hoped that when the network reached capacity and transactions began to destabilize the crisis point, the fight would cease and miners would quickly move to whatever network chain was more valuable to their economic interests. But to this day, the dispute has dragged on without either side clearly declaring victory, leaving tens of thousands of customer transactions in limbo.