Bitcoin developers split: Insiders: It's like a coup

Beijing time, August 19th morning news, differences of opinion have emerged among Bitcoin's main developers, and they are engaged in a heated debate over whether the digital currency software should be modified to enable more and faster transactions.

Bitcoin, a web-based cryptocurrency, provides a way to quickly and anonymously send money around the world without third-party verification, a feature that has attracted users ranging from drug dealers to geeks looking to circumvent capital controls.

Last Saturday, two core figures in the Bitcoin field developed another version of Bitcoin. They are Bitcoin lead developers Gavin Andresen and Mike Hearn.

For months, Andreessen and Hearn have been arguing with three other lead developers of Bitcoin: whether the blocks that process bitcoin transactions should be expanded from the current 1MB to enable more than three payments per second.

This new version of Bitcoin is called Bitcoin XT, which increases the block capacity to 8MB and can complete 24 transactions per second. Although it is far lower than VISA's processing speed of 20,000 transactions per second, it will increase every year in the future, so Bitcoin will continue to grow.

Opponents of Bitcoin XT argue that increasing the block size could undermine the purpose of the decentralized payment system because the additional computer memory requirements could squeeze out the thousands of independent "nodes" that currently exist on the network.

Some have argued that the split marks the end of Bitcoin. But Hearn told Reuters on Tuesday that the cryptocurrency will continue to exist regardless of whether Bitcoin XT is accepted or not.

“If we thought it might kill bitcoin, we wouldn’t do it,” he said, adding that about 10% of nodes had agreed to use Bitcoin XT since Saturday.

But bitcoin traders don’t seem to have much to worry about: Although its value has fallen about 4% on the Bitstamp exchange since Saturday, that’s not too big a drop for the digital currency, which suffered a more than 6% drop in a single day earlier this month.

Anderson and Hearn believe that Bitcoin inventor Satoshi Nakamoto wanted to expand the processing power of the digital currency as technology advances in order to expand its reach. But opponents believe that Bitcoin was never intended to challenge traditional payment systems.

“I’ve been watching this from the beginning, and I think it’s a coup,” said Jon Matonis, a founding director of the Bitcoin Foundation, where Andreessen serves as chief scientist.

According to the programming of the Bitcoin XT software, no changes will occur before January 11 next year. If 75% of the mining computers that verify Bitcoin transactions register this software by then, they will automatically switch to Bitcoin XT. If the 75% target is not reached, the status quo will remain.

Until then, the issue is likely to continue to spark heated debate. A person claiming to be Satoshi Nakamoto has even joined the discussion online, supporting the Bitcoin Core team and arguing that Bitcoin XT is a "fake Bitcoin." But most people believe that this person is a fake Satoshi Nakamoto.

“Bitcoin was originally intended to keep people from being influenced by some charismatic leader, even if it’s Gavin Anderson, Barack Obama, or Satoshi Nakamoto,” the man who calls himself Satoshi Nakamoto wrote.