Each transaction that occurs on the block chain takes up a little bit of space, and these transactions all get squished into a virtual box (a block). Bitcoin currently operates with a 1MB limit. What this means is that only so much information it can process in each block, this currently comes to roughly seven transactions per second.
The discussion recently in the Bitcoin ecosphere has been to increase the block size to 20MB, thereby allowing more transactions in each block, increasing the transactions per second.
As some postulate, bitcoin is unlikely to acquire mainstream adoption if it cannot match and beat the transactions per second that the major payment providers process.
Join CCN for $9.99 per month and get an ad-free version of CCN including discounts for future events and services. Support our journalists today. Click here to sign up.
MasterCard Worldwide, Frequently Asked Questions states that;
MasterCard processes an average of 51 million authorizations of financial transactions a day, enabling consumers to make purchases instantly, anytime, almost anywhere, in both the virtual and real worlds.
With Bitcoin-Xt, the plan is to go ahead with a big increase at first that will be followed by automatic incremental block size increases over time.
Also Read: Gavin Andresen: We Have a Bitcoin Soft Fork Going On – ETA of Increased Block Size “6 Months to a Year”
In the SourceForge message from Gavin Andresen on this subject, he states that his method of adoption would be to contact users of Bitcoin-Core and ask them to adopt the new changes if they believe that increased block changes are the way forward. And then to approach miners if all is going smoothly.
Mike Hearn, well known in the bitcoin space, has asked for those interested in working on the Bitcoin-Xt project (bitcoin with bigger blocks) to contact him via Google groups or email him via [email protected]. And you can check his Reddit post here if you are interested further.
When I asked about commit access for Bitcoin-Xt and core, Gavin replied that Mike currently has sole control of Bitcoin-Xt and that;
I assume Bitcoin Core commit access wouldn’t change (although I’d like to see more people given commit access, but that’s up to Wladimir and the other core committers to decide). This is very much the Linux development model, where there is no One True Source Tree.
Democratization of Money
It is a very interesting approach to a problem that was unable to be agreed upon by the core developers. Many developers agree that block size increase is needed, but there is a lack of strong agreement as to how it should be implemented.
This approach is the let’s do it and see how the public decides, the free market at work. Or it could be seen as Bitcoin-Xt will be seen as test-bed for something that Bitcoin-Core can easily adopt once it has been seen to be working safely.
We cannot say anything for sure at this point, but one thing we can say, is that we live in interesting times.