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Pact to speed up bitcoin drives digital currency to record high

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Bitcoin's seemingly unstoppable rally has just been given new impetus.

[LONDON] Bitcoin's seemingly unstoppable rally has just been given new impetus.

The cryptocurrency extended its surge by 10 per cent to a record-high US$2,690 on Thursday, bringing gains this year to 182 per cent, after an agreement to upgrade the speed of processing transactions. 

Before the pact, which was revealed on Tuesday, the digital currency faced a swelling backlog of transactions due to a cap on the amount of data the bitcoin blockchain can process. Disagreements over the right solution had fuelled fears the digital asset would be split into two.

This week, Barry Silbert, founder of Digital Currency Group, posted a pact signed by more than 50 companies on increasing the block size and activating Segregated Witness, a new way of verifying transactions.

Market voices on:

"It's pretty significant to put this forward, have a consensus and move forward with a solution," said Ryan Rabaglia, head trader at Octagon Strategy Ltd, a digital currency trading firm in Hong Kong.

"It's always been on the back burner as something that can potentially disrupt bitcoin's growth."

While the signatories represent 83 per cent of bitcoin hashing power, many similar agreements have fallen through in the past, including one that was supposed to be activated in July this year.

SegWit, which was released last year, has also drawn ire from some corners of the bitcoin community.

"The whole industry is a bit immature in ways," Mr Rabaglia said.