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Plan Emerges To Prevent Two Versions Of Bitcoin

Last Updated March 4, 2021 4:45 PM
Lester Coleman
Last Updated March 4, 2021 4:45 PM

A plan has emerged to heal the rift between the established bitcoin and the newly-introduced Bitcoin-XT by adopting some of the ideas behind Bitcoin-XT but preventing the spread of a different version of the currency, according to Bloomberg .

bitcoin-logoA group of bitcoin backers, including BitPay, Blockchain.info, Circle and KnCMiner.com, wrote a letter this week in support of the existing version of bitcoin—provided it adopts some of the central proposed by Bitcoin-XT’s developers, Gavin Andresen and Mike Hearn. Andresen and Hearn were receptive to the proposal.

Fork Threatens Bitcoin’s Growth

Bitcoin-XT has threatened to split the community of hackers, developers and technophiles who have embraced the virtual currency. The fork could lead to users having to juggle between different iterations of bitcoins, similar to the way different versions of the U.S. dollar had existed in the 18th century before the American states revolted against colonial powers.

The proposal aims to heal the rift by adopting some of Andresen and Hearn’s ideas, and at the same time preventing the growth of a different version of bitcoin. Having two versions could confuse users and stunt bitcoin’s overall growth. The proposed changes focus on expanding the capacity of bitcoin’s underlying software so that transactions can process faster and more efficiently.

The plan could enable the existing bitcoin network to find use as widely and frequently as Visa. Bitcoin-XT’s mid-August debut has gained traction and already accounts for more than a 10th of the computers running bitcoin software. Bitcoin’s price fell to its lowest level in six months.

Some bitcoin players, such as Coinbase, were noticeably absent from the letter.

Also read: Discussion Of Bitcoin-XT Banned From Bitcoin SubReddit

Proposal Gains Support

“If this proposal is implemented by a big enough majority of bitcoin infrastructure providers, bitcoin will have taken a big step towards scaling up for the large transaction flow it is trying to support,” said Gil Luria, an analyst at Wedbush Securities.

Andresen and Hearn welcomed the plan, saying it addresses the main issue they raised.

“It’s great news. Bitcoin-XT implements BIP 101 + other things,” Hearn said in response to a Bloomberg query.

The letter doesn’t say if they’ll run XT or not, but that’s OK: the other changes in it are useful but not as important in the same way as the block size limit is. If these companies take just the BIP 101 changes and apply them to Bitcoin Core, we’re all good.

The market will ultimately determine whether bitcoin will exist as a single universal digital currency or multiple forked versions.

Featured image from Shutterstock.