For people that own any amount of bitcoin, the largest cryptocurrency on the web, Tuesday was a pretty great day.
Two gigantic things happened in the world of bitcoin:
- Around midday, the cryptocurrency hit an all-time high of $3,525, averaged across global markets, according to CoinDesk price estimates.
- Later that afternoon, at about 3 p.m. Eastern, a software fix called “Segregated Witness” officially “locked in,” making it a formal part of the bitcoin blockchain, or the immutable ledger that contains the system of rules and code the cryptocurrency is built on.
In the past few weeks, the cryptocurrency has avoided a major fork — or split in the currency’s system that creates two rival systems — that could have severely impacted its value after a protracted dispute over software. It also weathered a smaller, less-destructive fork with the creation of Bitcoin Cash. At the moment, Bitcoin is at $3,485 — down slightly from the peak today, but still riding high. Overall, cryptocurrency in general is having a heck of a summer: bitcoin’s latest peak pushed the value of all publicly traded cryptocurrencies or “cryptographic assets” above $120 billion for the first time ever, topping yesterday’s total market cap of $116 billion.
Segregated Witness, meanwhile, will finally address bitcoin’s biggest problem: speed. Bitcoin is crippled by the fact it can only facilitate a mere seven transactions per second. As more and more people buy in and adopt the cryptocurrency, seven transactions per second will become prohibitively slow. By comparison, the system that powers Visa credit and debit cards usually sees about 1,700 transactions per second and has the power to handle 56,000 per second if demand spikes. Sure, there are far more Visa users than bitcoin, but if the currency ever wants to compete with major financial networks it has to find a way to get faster — and on Tuesday, SegWit became that solution. Basically, it segregates off a part of the code in each bitcoin block that was taking up a lot of space and slowing down transactions. With that fix in place, the system can handle more transactions per second.
Experts told Inverse for earlier stories that SegWit was a “unilaterally positive change” for the currency. Others push for still bigger changes for the currency. A certain vocal faction wants to take a more drastic step to improve bitcoin’s speed, doubling the size of the blocks and souping up the software so that everything runs at a higher speed. The problem, of course, is that smaller participants in the system with less sophisticated hardware will get left behind — but for now, this battle seems to have been postponed. And bitcoin’s surging price is a pretty good wave to ride.Photos via Flickr / zcopley