If you were hoping for a slightly more positive week in terms of bitcoin news, look away now and don’t hold your breath!
Following last week’s doom and gloom, this week’s news coverage leaves much to be desired for those seeking more uplifting trends.
Journalists from outlets across the globe jumped at the chance to cover the bitcoin fork and the subsequent public debate that ensued.
Elsewhere, some reporters attempted to connect the dots between recent events and the digital currency’s fluctuating value – mostly ignored by outlets.
The Economist covered the news about the bitcoin fork in a piece titled “Forking Hell”, which began:
“Federal Reserve deeply split. Renegade group of board members to create separate American dollar,” continuing “such a headline seems highly unlikely, but in this essence is what is happening in the land of bitcoin, a digital currency. ”
The article then noted how last week, two of bitcoin’s developers had released an alternative version of the cryptocurrency’s software. “With no easy way to resolve feuds, some are warning that this ‘fork’ could result in a full-blown schism,” read the piece.
“The dispute is predictably arcane. The bone of contention is the size of a ‘block’, the name given to the batches into which bitcoin transactions are assembled before they are processed. Satoshi Nakamoto, the crypto-buff who created the currency before disappearing from view in 2011, limited the block size to one megabyte.”
“That is enough to handle about 300,000 transactions per day – suitable for a currency used mainly by geeks, as bitcoin once was, but nowhere near enough to satisfy the growth aspirations of its boosters. Conventional payment systems like Visa and MasterCard can process tens of thousands of payments per second if needed,” it noted.
The piece then went on to note – quite rightly – that the debate about increasing the block size has long been a matter of contention among the crypto community. “Overlapping cabals of ‘core maintainers’ and ‘main developers’ serve as de facto keepers of the currency, especially in Mr Nakamoto’s continued absence,” it said.
Writing for The Guardian, Alex Hern began by alluding to the fact that bitcoin was facing a civil war.
Exposing both sides of the debate, Hern noted that the “fork” was being supported by Mike Hearn and Gavin Andresen, “two of the most senior developers involved in the bitcoin project”.
“Both are involved in the Bitcoin Foundation, the non-profit group that oversees the currency’s development: Hearn is the former chair of the foundation’s law and policy committee, whilst Andresen is the chief scientist of the foundation,” continued the author.
Hern – who’s written about bitcoin in the past – then went on to cite Hearn’s post on the bitcoin developer mailing list in which he reasoned that a fork was the only way of solving the deadlock within the bitcoin community.
Hearn was cited in the piece as saying: “I feel sad that it’s come to this, but there’s no other way. The Bitcoin Core project has drifted so far from the principles myself and many others feel are important, that a fork is the only way to fix things.”
In the meantime, the journalist noted the differences between Bitcoin XT and Bitcoin Core – the digital currency’s previous version. “The key difference … is size of the blocks into which transactions get grouped every 10 minutes. Core supports a maximum block size of 1mb, which XT increases to 8mb. Hearn, and the other supporters of XT, argue that that increase is necessary if the currency is to continue growing.”
Bloomberg‘s Olga Kharif and New York Business Journals‘ Michael del Castillo also picked up on the news, respectively noting how bitcoin was having an identity crisis and how the digital currency was at a crossroads.
Kudos to Motherboard‘s Sarah Jeong for contributing a witty portrayal of bitcoin’s struggles.
“So, how are things going with that whole bitcoin thing? Oh, not much, not much, there’s a new bitcoin client that everyone’s talking about, with some tweaks to the protocol. Also a major subreddit is censoring all discussions of the new client and Satoshi Nakamoto has apparently returned like an ancient god waking from his magic number, only to send out extremely unhelpful emails to public mailing lists.”
Timothy B Lee at Vox, said Jeong, called it a “constitutional crisis“, which she believes was “an awfully serious take on an Internet drama that more closely resembles a LiveJournal fan fiction community meltdown after everyone finds out that JK Rowling kills Dumbledore.”
Similarly to her contemporaries, Jeong explained the heart of the problem, whilst also noting the connection with bitcoin’s price crash earlier in the week.
Keeping with her sarcastic, but effective rhetoric, she said:
“Oh, also, the price crashed almost a hundred dollars yesterday, probably because of the ongoing debate.”
Jeong continued: “Keep in mind that this whole flame-out is over a fairly technical ‘fix’ to bitcoin, the kind of detail, where if this were any other piece of software, would make for a dull patch note to a mandatory update. People aren’t angry because this change is a big deal, people are angry because all change is a big deal. If this is a ‘constitutional crisis,’ it’s only because thousands of little Scalias are losing it over the Constitution being interpreted for a time where people aren’t riding horses and pooping in buckets.”
Jeong was right, the price did crash.
As previously reported by CoinDesk, bitcoin’s price decreased by 14% in just half an hour following a ‘flash crash’ on Bitfinex.
According to the CoinDesk Bitcoin Price Index, the cryptocurrency’s value had been relatively stable between $200 and $255 mark, but fell to $214.36 before midnight (UTC)
Although that particular price drop was related to events within Bitfinex, it is fair to say that the digital currency’s price has been in a downward trend for the last month or so.
Whether this can be attributed to the very public forking debate or whether it is namely due to a confluence of factors remains to be seen.
Perhaps what one can – and should – take away from this is the mainstream media’s seeming disinterest in the cryptocurrency’s price.