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Bitcoin's future threatened by software schism

Section: Daily Dispatches

By Richard Waters
Financial Times, London
Thursday, February 11, 2016

SAN FRANCISCO -- A schism among software developers that threatens the future of bitcoin has broken into the open with Wednesday's release of a rival version of the technology behind the digital currency.

The current version of bitcoin, which is maintained by a fractious group of volunteer developers, is at risk of hitting a wall because of a limit on the number of transactions it can handle.

But disagreements over the technology's direction have prevented a change in the code to allow more entries to be made on blockchain, a public ledger that is at the heart of the system, leaving bitcoin facing the risk of slowed or uncompleted transactions.

In an attempt to overcome the roadblock, a group of developers claiming backing from some of the bitcoin world's main players released a rival version of the code on Wednesday.

Known as Bitcoin Classic, it doubles the size of the "blocks," or records of transactions, that are entered into the public ledger. The new code is meant to double the capacity of the network from its current limit of seven transactions a second.

The release represents a "hard fork" from the so-called Bitcoin Core code on which the digital currency at present relies, resulting in two rival codebases that will vie for support among users. ...

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