Last week’s selloff of bitcoin may have been met with a shrug by many market analysts given its volatile history, but if the selloff itself did not generate much debate around the health of the digital currency, it did serve to bring to the surface a question at the center of a debate that has already been raging for a couple of years among industry players: Should bitcoin be split into two competing coins.
The the fight over bitcoin’s future are split between two competing factions, as the Wall Street Journal reports: Those who want bitcoin to be more of a commodity, like gold, with a limited supply that can accrue value; and those who want bitcoin to be a currency that can be used quickly in transactions like the dollar.
The two sides have been at a stalemate, but new proposals coming this summer could provide a breakthrough—either changes in the bitcoin network’s processing capacity or a split between a high-speed and slow-speed bitcoin. “You watch a fine marriage that is falling apart,” says Emin Gun Sirer, a Cornell professor who studies virtual currencies. “Eventually, you say, I think a divorce is the best thing.”
The bickering has hindered interest in the virtual currency, sending some to a newer alternative, Ethereum, that has surged more than fortyfold this year and is now worth only about 20% less than all the traded bitcoin, according to CoinMarketCap.com.
The Journal gives more detail on the two sides in this rift: On one side are the businesses and investors who favor bitcoin being traded as a currency, which means increasing the number of transactions allowed (only seven transactions per second are currently allowed. On the other side are developers and “purists” who believe increasing these limits “could hurt their financial interests but also because it goes against their libertarian, anti-big business bent.”
Bitcoin fell 27% last week during the selloff after having reached a high of $3,018 on Monday.Despite the volatility, the digital currency is up more than 160% this year, according to the Journal.
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