Alex Petrov, CIO at the leading full-service Blockchain technology and Bitcoin infrastructure provider, shares his thoughts on the future of bitcoin, competing scaling solutions and what miners would do after the last bitcoin is mined.
CoinFox: How important are the ongoing debates on the future of the bitcoin network for the development of the technology?
Alex Petrov: Having an open dialogue is crucial. Discussion is the way to resolve misunderstandings and find a consensus on moving ahead.
CF: These days, miners are swaying between two solutions to the scaling problem: Segregated Witness and Bitcoin Unlimited. In your opinion, is there any future for BU?
AP: I consider BU a very risky option. In my opinion, it offers too crude a solution to the scaling problem for a few reasons.
First, simply increasing the block size limit will only bring linear growth to the number of transactions possible on the network.
Second, the bulkier the blocks, the slower the network will operate until the bitcoin client itself fails to process that amount of transactions. Bitcoin Unlimited is not as innovative as other solutions - it is like putting a heavier car body on the same engine and hoping it will go faster.
Third, the code has not gone through the full cycle of code development, testing and control. A hasty transition to a new version without a proper cycle of testing and adoption by bitcoin-based businesses could result in significant losses for users and companies alike and disrupt the whole bitcoin ecosystem.
Fourth, BU is run by a small team of developers. If something goes wrong, there are simply not enough of them to help every business working on the bitcoin blockchain.
CF: Still, early in March, one of the largest Chinese miners AntPool chose in favour of Bitcoin Unlimited. Do you expect Chinese miners to change their mind soon, and if so, why?
AP: We do not speculate on actions of other companies in the community, but anyone considering Bitcoin Unlimited may change their mind as they review the technical and commercial risks and BU's inability to deliver serious exponential growth.
CF: How does BitFury see its future after the last bitcoin is mined? What would happen to the mining market in general and mining hardware producers in particular?
AP: We are dedicated to securing the Bitcoin Blockchain through mining. We take our role of processing transactions seriously. After the last bitcoin is mined, the prediction is that the miner's reward will be replaced by transaction processing fees. Of course, by the time the last bitcoin is mined, the ecosystem will likely look very different and there may be other considerations for bitcoin mining companies. This is why Bitfury is committed to exploring other areas of bitcoin and Blockchain, including our expansion in 2016 to Blockchain software.