Bitcoin Fails, Blockchain Full And Fundamentals Broken—Mike Hearn

In what could be a major shock for the Bitcoin community, Bitcoin core developer Mike Hearn has claimed that “Bitcoin has failed”, and has given a number of reasons why he believes so in a fairly detailed blog post on Medium. Not only this, he also said that he will no longer participate in Bitcoin development and has sold all his coins.

“From the start, I’ve always said the same thing: Bitcoin is an experiment and like all experiments, it can fail. So don’t invest what you can’t afford to lose… But despite knowing that Bitcoin could fail all along, the now inescapable conclusion that it has failed still saddens me greatly. The fundamentals are broken and whatever happens to the price in the short term, the long term trend should probably be downwards. I will no longer be taking part in Bitcoin development and have sold all my coins”, he said.

Explaining the reasons for bitcoin’s failure he said that the system has come to completely controlled by just a “handful” of people and is on the brink of technical collapse.

The revelations come after Bitcoin XT or BIP-101 (Bitcoin Improvement Proposal -101), put forward by Gavin Andresen and Hearn failed to get 75% consensus of all the bitcoin node owners on the set date 11 January. The proposal aimed at increasing the block size from the present 1MB up to 8MB, and doubling every two years until a block size of 8GB was reached.

“The block chain is full…An entirely artificial capacity cap of one megabyte per block, put in place as a temporary kludge a long time ago, has not been removed and as a result the network’s capacity is now almost completely exhausted”, Hearn said.

He pointed out that the blockchain is controlled by Chinese miners, and “two” of whom control over 50% of the hash power, further still, more than 95% of hashing power was controlled by a few guys sitting on a single stage at a recent conference. He added that the miners are not allowing the block chain to grow and the reasons include:

• Developers of “Bitcoin Core” have refused to implement necessary changes
• Miners are terrified of anything that might make the news as a split and cause investor panic
• The Chinese internet is so broken by their government’s firewall that moving data across the border barely works at all

He further explained how some prominent people in the bitcoin space decided to “kill” the Bitcoin XT proposal, which included deleting posts with the words Bitcoin XT from discussion forums, expulsion of a “massive” number of users from these forums and most importantly, Coinbase — the largest and best known Bitcoin startup in the USA —  temporarily erased from the official Bitcoin website for picking the “wrong” side.

He also said that within a few days of launching Bitcoin XT around 15% of all network nodes were running it, and at least one mining pool had started offering BIP101 voting to miners. That’s when the denial of service attacks started. The attacks were so large that they disconnected entire regions from the internet.

“The mining pool that had been offering BIP101 was also attacked and forced to stop. The message was clear: anyone who supported bigger blocks, or even allowed other people to vote for them, would be assaulted”, he said.

Calling the “Scaling Bitcoin” conferences as bogus, Hearn said that while the first conference actually banned discussion of concrete proposals, the last conference did not result in any plan to raise the limit. He added that although some companies (like Coinbase and BTCC) have realised that they got played, it is “too late” now as organic growth added another 250,000 transactions per day.

However, he said, “Still, all is not yet lost. Despite everything that has happened, in the past few weeks more members of the community have started picking things up from where I am putting them down.”

He concluded saying that in an uncensored forum people have been asking him to stay, but he has moved on to other things.