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.”
