Bitcoin developers sell off their holdings

Mike Hearn, a well-known Bitcoin developer, said that this virtual currency has failed and he has sold all the Bitcoins he held.

Hearn, a British programmer who quit Google two years ago to work on Bitcoin full-time, now believes the virtual currency will fail.

There is no reason to think that Bitcoin is better than the existing financial system. Hearn wrote in a long article that its foundation has collapsed, and no matter how the short-term price changes, the long-term trend is downward. I will no longer participate in Bitcoin development, and I have already liquidated my position and left.

Hearn said a technical limitation in the bitcoin network that caps the size of blocks - permanent records of bitcoin transactions generated every ten minutes - meant the network was overextended and unable to keep up with demand.

The bitcoin system relies heavily on these blocks, which are added to a central ledger called the blockchain to verify transactions. The blockchain is always run by bitcoin users and is the basis of the virtual currency, recording every purchase and sale of bitcoins.

The current block size limit is 1MB, which has not changed since the mysterious inventor of Bitcoin, Satoshi Nakamoto, introduced the technology in 2009, so less than 3 transactions can be made per second. Hearn said that the Bitcoin network has a large backlog of transactions, but the disagreement within the entire Bitcoin community has prevented them from introducing new changes.

The value of Bitcoin fell about 7% after Hearn's post.

Hearn and Bitcoin chief scientist Gavin Andresen both support a new version of the Bitcoin code that would increase the block size to 8MB. But the new network, called Bitcoin XT, has sparked dissatisfaction among some community members, who believe it goes against the original design of Bitcoin.

The Bitcoin community on the US social news website Reddit has banned discussion of Bitcoin XT, and Hearn said that those who support this plan have also been attacked, including the famous Bitcoin startup Coinbase. A user who claims to be Satoshi Nakamoto also said that the adoption of Bitcoin XT will make Bitcoin a failed project, but most people believe that this person is not Satoshi Nakamoto himself.

Bitcoin is designed to be open source, so 75% of the Bitcoin network must adopt XT to truly allow this technology to be accepted by the public. However, this proportion is currently only 10%.

Many Bitcoin supporters believe that Hearn's departure is just sour grapes, mainly because Bitcoin XT has not received support. Anderson also believes that Hearn's views are too pessimistic.