Mike Hearn, one of Bitcoin’s core developers says Bitcoin is ‘dying’
Is Bitcoin dead or is it just dying? The truth is out there. However, one of the core member of Bitcoin development team feels that it is close to dying.
Mike Hearn, one of Bitcoin’s core developers, has published a tell-all blog regarding the current state of the famous cryptocurrency, and his conclusion is that the Bitcoin experiment is very close to failing.
Hearn, one of five senior developers who has spent more than five years working on the web-based currency, said he would no longer be taking part in development.
“Despite knowing that bitcoin could fail all along, the now inescapable conclusion that it has failed still saddens me greatly,” Hearn said in his post.
“The fundamentals are broken and whatever happens to the price in the short term, the long term trend should probably be downwards,” he wrote. “I will no longer be taking part in Bitcoin development and have sold all my coins.”
According to Coindesk, Bitcoin saw its value plunge to $358.77, a 16.5 percent drop from the virtual currency’s previous close of $429.73, the day after his post.
So is Bitcoin dead? It is not dead. Objectively, the Bitcoin markets are still alive and well, and the Blockchain, the digital platform on which the currency relies, is still operational. The Bitcoin blockchain (transactions database of Bitcoin) currently has a capacity of one megabyte, which Hearn says is “an entirely artificial capacity cap”, and allows a maximum of just three payments to be processed per second.
The technology also couldn’t develop anymore because more than 50% of Bitcoin network and computational power is controlled by a large group of Chinese Bitcoin miners. Hearn has been locked for months in a battle with the other lead developers over whether the “blocks” in which bitcoin transactions are processed should be enlarged.
Mainly due to poor Internet conditions in China, these Chinese miners are preventing an increase of the basic Bitcoin transaction block to a value bigger than 1MB, which will decrease their revenue stream.
The reason for this is whenever a computer in the Bitcoin network generates a new block to add to the blockchain, they are awarded 25 bitcoins, or just under $10,000 at the Sunday bitcoin price of $385.70.
After trying to increase the Bitcoin’s blockchain capacity, the largest US Bitcoin startup, Coinbase has been removed from the Bitcoin website. Also, projects (Bitcoin XT) aimed at advancing Bitcoin and the transaction capacity are actively being banned from the official Bitcoin forums. In addition, companies deploying Bitcoin XT were “coincidentally” hit by DDoS attacks.
The biggest criticism is that people that currently run the Bitcoin Core are planning to let clients the right to modify transaction details until the transaction appears in the blockchain . This means that after a payment has been made, people can make changes to the sum or the recipient’s wallet address. However, this can take up to a few hours since there are delays on the network. 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.”
Hearn 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.
Hearn’s post would be the 89th instance of someone claiming the currency was dead. People have been declaring Bitcoin dead since 2010, and it’s been declared dead twice already in 2016.