Support is building for changing part of bitcoin's design, after two high-profile developers introduced an alternate version of the virtual currency aimed at speeding up transactions and future-proofing the digital money.
Some of bitcoin's biggest backers, including BitPay, Blockchain.info, Circle and KnCMiner.com, wrote a letter this week in support of the existing version of bitcoinbut only if it adopts some of the central ideas proposed by the renegade developers, Gavin Andresen and Mike Hearn.
Earlier in August, the duo proposed a fork to bitcoin called Bitcoin XT, which threatened to split the community of hackers, developers and technophiles who have embraced the virtual currency. For regular users, the fork could lead to people having to juggle between different iterations of bitcoins, like the different versions of the dollar that existed in the 18th century before the American states revolted against colonial powers.
This week's proposal is aimed at healing that rift, by adopting some of Andresen and Hearn's ideas, and at the same time preventing the spread of an altogether different version of bitcoin that could make things more confusing for many users and hamper wider usage of the virtual currency. Technically, the changes are focused on expanding the capacity of bitcoin's underlying software, so that transactions can be processed more quickly and efficiently. That would open the door for the existing bitcoin network to be used as widely and frequently as Visa's.
Fueling these developments is the community's response after Bitcoin XT's mid-August debut. It quickly gained traction, accounting for more than a 10th of the computers running bitcoin software, while the price of bitcoin dropped to its lowest level in six months.
Still, some of the biggest names in the bitcoin universe, such as Coinbase, were noticeably absent from the letter:
Brian Armstrong (@brian_armstrong) May 5, 2015
"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," says Gil Luria, an analyst at Wedbush Securities.
For now, signs are pointing toward a resolution that will keep bitcoin intact. Andresen and Hearn reacted positively to the letter, saying that it addresses the main issue they raised. Here's Hearn responding to a query from Bloomberg:
It's great news. Bitcoin XT implements BIP 101 + other things. 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.
Ultimately, market forces will determine whether bitcoin is destined to exist as a single universal digital currency or multiple forked versionsthe same forces behind the number of bitcoins in circulation and their price against other real-world currencies.