Divisive 'Bitcoin Unlimited' solution crashes after bug exploit

[TOKYO] A controversial plan to fix bitcoin's network congestion suffered a setback after attackers used a newly-discovered bug to crash the software.

Bitcoin Unlimited, which had been attracting support from the digital currency's biggest miners, was attacked after developers brought the bug to light.

The numbers of "nodes" hosting Unlimited fell to about 300 from 800 following the attacks, the lowest level since October, according to website coin.dance which tracks industry data.

Nodes make up the core of bitcoin's infrastructure. Those with mining abilities shoulder a significant workload of verifying transactions with specialised computers, while non-mining nodes independently track those transactions and effectively ensure the entire network is functioning as expected.

By running a certain version of the software, such as Unlimited, each node can signal how they want bitcoin to evolve.

While the exploit was quickly patched, it is validation to critics who say Unlimited programmers lack the experience to fix bitcoin's complicated congestion issue.

Unlimited had in recent weeks won the backing of influential miners, as some decided to give up on reaching a community consensus after more than two years of discussion. The bug raises uncertainty about whether miners will follow through on their support.

The Unlimited side wants to remove a pre-programmed cap on the amount of data bitcoin's network can process, which they argue can end congestion. Opponents say removing the limit would put too much power in the hands of large organisations who have better resources to process large amounts of data, potentially undermining bitcoin's independence from governments and global banks.

They've offered to ease the congestion with an approach called SegWit, which uses a slightly different method to verify transactions.

Both sides took to social media to celebrate or defend their respective camps. The community has grown increasingly polarised as bitcoin's underlying network has become more backlogged than at any point in the currency's eight-year history.

BLOOMBERG