Chief executive of the major bitcoin exchange, Coinbase, has unveiled his views on the future of bitcoin network in a new blog post he published after attending the Satoshi Roundtable conference, which brought together around 70 members of the bitcoin community. According to Brian Armstrong, the Bitcoin Core, is the largest systemic risk to the digital currency.
The bitcoin industry is currently facing a huge disagreement between most cryptocurrency companies and the core developers about the scale of the bitcoin network. While the first are only aimed at further growth, the latter are concerned about the influence on-chain scaling will have on decentralization. The miners, meantime, are caught in between two sides.
After discussing the possible solutions to a problem of scalability during the conference, it became evident that the split is too serious. According to Armstrong, “the systemic risk to bitcoin if Bitcoin Core was the only team working on bitcoin”.
He pointed out that some members of the team lack maturity and are not easy to work with, what prevents the influx of new developers into the bitcoin industry. Besides, he underlined they prefer not to act if there is no perfect solution, even if it puts cryptocurrency at risk.
“They seem to have a strong belief that bitcoin will not be able to scale long term, and any block size increase is a slippery slope to a future that they are unwilling to allow,” Armstrong said.
Under the failure scenario, explained during the conference, the mining of virtual currency will become unprofitable after the upcoming bitcoin halving. If the cost of bitcoin will be about $425, the price of a coin to mine will rise from $250 to $500.
“This would mean that we start getting blocks mined every 20 minutes on average instead of 10 minutes. But blocks are already 70% full today. If the average confirmation time goes to 20 minutes, it means that we will be at 140% of capacity on every block, and start accumulating a backlog,” he wrote.
Although the likelihood of this scenario is unknown, Armstrong argues there is no reason to risk the network.
“The network today, with 70% of blocks full, is already experiencing congestion issues and backlogs. Any reduction in hashing power will exacerbate the problem,” he noted.
In order to avoid the scenario, Armstrong believes the bitcoin network should be immediately upgraded to Bitcoin Classic, a group of developers and enthusiasts who propose to enlarge the block size to 2 MB. He also proposed to form a new team of developers, who will help the bitcoin protocol to continue scaling.
“My belief is that we will either be doing this upgrade now (when there is sufficient lead time for everyone to prepare), or we will be doing it in the midst of an emergency down the road,” he said.