Bitcoin Transactions Face Massive Delays; Currency’s Design Flaws Exposed
Flash back five years and Bitcoin, the crypto-currency that so tantalized techies and excited investors were on the rise, but it is a completely different state of affairs today for this digital currency of the future. Its core community is at war with each other and ordinary consumers still don’t care about this supposedly revolutionary form of money.
Now making things more difficult for Bitcoin, the currency is facing a new issue which could spell doom for its existence. As of now, time taken for Bitcoin transactions to be processed has increased dramatically resulting in funds being stranded, and organizations are not accepting transactions in the cryptocurrency.
The current problem is not something that has hit the community out of the blue, as many within the community who use or work on the currency have been pointing out this looming issue for some time. The problem relates to how transactions are processed on the Bitcoin system, the decentralized, distributed ledger technology that manages transactions of the currency.
Bitcoin’s design which is capable of processing at best only seven transactions per second hit its capacity limit, leading to a backlog of stranded transactions being built up. Currently, there were about 20,000 Bitcoin transactions waiting to be processed.
The Bitcoin currency transaction design is as such that many of these transactions will go faster than other, depending on how much the transaction is deemed worth of in monetary terms. Transactions on Bitcoin can be put ahead in a que by adding a fee to the Bitcoin transaction, essentially meaning that those who didn’t pay such a fee or a sufficiently big fee may have to wait hours and in the current situation days for a transaction to complete.
Bitcoin’s overall capacity has hence become a major problem for its existence. Stopgap measures to increase the capacity have been suggested and implementation of it might hardly be months away, but will only delay the inevitable.If things have to be fixed, then the voices coming from the user community needs to be heard and a radical rethink of the currency’s design needs to be looked at.