Bitcoin has “failed,” according to one of its core developers. Mike Hearn said in a blog post that he was ending his involvement with the organization and is selling his holdings.
“Despite knowing that bitcoin could fail all along, the now inescapable conclusion that it has failed still saddens me greatly,” Hearn said in a report from Reuters.
The issue for Hearn is the battle over whether the size of bitcoin transactions should be enlarged. Currently, each bitcoin block has a capacity of one megabyte and allows a maximum of three payments to be processed per second.
Hearn helped to develop software that would increase each transaction block to eight megabytes and allow 24 transactions to be processed every second. The new software has not been adopted, leading him to claim that the bitcoin network will soon run out of capacity as the number of transactions grows, making the network unreliable and vulnerable to fraud.
Bitcoin trading slipped from $430 to $390 after Hearn published his post.
“The current price of bitcoin is supported almost entirely by people speculating on its future, in the assumption that this could be the money of tomorrow,” he said. “So if the network starts to collapse, then a lot of people are going to look at it and say, ‘Well, maybe we’ve miscalculated (its) future value.”