The number of unconfirmed Bitcoin transactions has escalated to over 220,000 as they wait to be included into the blockchain, with that number continuing to rise.
Limited to confirming transactions every ten minutes with disk space measured in bytes, Bitcoin’s scalability issue couldn’t be more obvious. Despite the high volume of unconfirmed Bitcoin transactions, though, its value has increased with its market cap now worth over $30 billion. Trading prices indicate that Bitcoin is now trading over $1,900 for the first time.
However, while Bitcoin has come a long way, compared to Visa it’s small fry. According to Visa, they handle an average of 150 million transactions each day and is capable of processing over 24,000 transactions each second. Bitcoin handles seven and in the last 24 hours has processed just under 300,000 Bitcoin transactions.
For a digital currency that is set on changing the way people transact with money it has a long way to go before it can trump Visa. Yet, while the number of unconfirmed Bitcoin transactions rises, people are still using the currency as demand for it increases.
One way people are avoiding these long queues is to, essentially, queue jump. The only way to achieve that is to pay high fees, which not everyone can, or is willing, to pay.
The Debate Surrounding Bitcoin’s Scalability
As can be well imagined the number of unconfirmed Bitcoin transactions remains a focus point of discussion for the community.
Those within the Bitcoin Unlimited (BU) camp claim it has the solution to solving Bitcoin’s issues. But so too do the Segregated Witness (SegWit) and the User-Activated Soft Fork (USAF) camps.
Only recently Bitcoin payment processor BitPay announced it was teaming up with Bitmain, the world’s largest Bitcoin mining hardware producer in a multi-million dollar development agreement. In the past, Stephen Pair, BitPay CEO has come out against USAF while Bitmain and its founder Jihan Wu are known to support BU.
Roger Ver, known as the Bitcoin Jesus and an early investor in Bitcoin related startups, appears to be fully behind the activation of BU, as can be seen from this tweet.
While stating in this tweet, that ‘SegWit doesn’t solve any of the problems that Bitcoin users are experiencing today.’
But as we can see from this post from Whale Panda, he’s also supported Bitcoin XT and Bitcoin Classic in the past too. Undoubtedly, his continued change of support to each possible solution has many within the Bitcoin community questioning his motives.
At the time of writing BU has just over 40 percent support while SegWit has 34.1 percent, according to Coin Dance. Unlike Litecoin, which recently activated SegWit on its network and saw relatively easy support for the activation from the Litecoin community, Bitcoin is struggling to reach a consensus. As a result, percentage points rarely seem to move much between 30-40 percent. Unfortunately, if it remains like this for much longer, the Bitcoin community will continue to regard unconfirmed Bitcoin transactions as the norm with no solution in sight.
Yet, while it’s clear that a solution needs to be reached, it is those who are using their bitcoins and moving them around who pay the price. It’s a contentious subject and will remain so with no light at the end of the tunnel yet for an agreement to be reached.
In light of the unconfirmed Bitcoin transactions, when users log into Coinbase they are greeted with a notice regarding inbound Bitcoin transaction delays.
Yet, with the total amount of transaction fees paid to miners increasing it is the miners who are unlikely to want a solution to be reached anytime soon.
Such a move, though, only paints Ethereum in a positive light. So much so, that Ether has sailed past the $100 mark again, pushing its market cap from $8.6 billion to just under $10 billion in 24 hours.
Litecoin’s price has also risen and is now trading under $30. For an altcoin that had been trading around the $3-5 mark for a few years it now appears to be enjoying a fresh wave of rejuvenation.
It seems that because of Bitcoin’s scalability issues, users are turning their attention to altcoins, which is understandable. Such a move, though, can only be to the detriment of Bitcoin further down the line if no agreement is reached.
The Impact on Bitcoin
It’s not known how this is likely to affect Bitcoin. After all, people are still using the currency and demand for it is increasing, which is evident with its price now trading over $1,900 for the first time.
Predictions that Bitcoin could reach between $5,000-$11,000 by 2020 after the block halving reward seems likely, taking into account its continued price rise over the last few weeks.
Of course, there is also plenty of speculation that Bitcoin is currently in a bubble that could burst any time. According to a Bloomberg article, the price of Bitcoin is up by three million percent since July 2010. Not only that, but the author of the report states that, ‘Bitcoin has all the attributes of a bubble in the making.’
The fact that there are thousands of unconfirmed Bitcoin transactions, high transaction fees and low numbers of processed transactions each day, could this end up affecting the price of Bitcoin, which in turn could see Bitcoin’s price burst as users turn to other digital currencies instead?
This, however, is speculative. Unless we have a crystal ball to see into the future we don’t know how far Bitcoin will rise or if it’ll fall to drastic levels not seen since last year. Something, though, needs to happen. The best thing that should happen is for a consensus to be made. Whether that’s on BU, SegWit or UASF who knows, but until that moment arrives this debate circulating Bitcoin’s scalability issues and the amount of unconfirmed Bitcoin transactions will remain unabated.
Everyone claims to have the solution, but no one is willing to agree on one that could push Bitcoin to new levels unseen of before. Until that time comes, we’ll just have to sit and wait patiently, and who knows how long that will be.
Featured image from Flickr via Jens Vinsrygg.