The Greeks are making Bitcoin go nuts

Greeks are rushing to buy Bitcoin as their economy slides deeper into crisis, but the currency’s decentralized system may not be able to handle that kind of volume, Bloomberg reports.

Over the weekend, Bitcoin, which has trading at its highest since March, had a stumble. It took nearly five-times longer than usual to process transactions, said Gil Luria, an analyst at Wedbush Securities.

A payment could take up to five hours to be confirmed, while some users were also unable to create new Bitcoin, he said.

The lag was caused by an update to the payment system’s PC software over the weekend — or more precisely, it was caused by a disjunction in the versions of software users own. Operators who hadn’t updated the software “put the whole system out of whack,” the article said.

It’s not the first time Bitcoin has seen this kind of software problem.

“I don’t know that it’s (ever) happened to this extent, because Bitcoin has never been this big,” Luria said.

Bitcoin’s customer base has increased, with nearly 120,000 transactions occurring a day in early June — an increase of 10 times since the same period in 2011, reported Coindesk, a Bitcoin researcher. Last week, Coinbase, a Bitcoin client, waived fees for customers buying with euros due to the Greek Crisis.

According to Bloomberg, Bitcoin will need to take market share from Bitcoin machine hobbyists to make software updates something to look forward to rather than dreaded in the future.

“This is test of a decentralized network,” Luria said. “Every time Bitcoin passes one of these tests, it gets stronger.”

Read the full article at Bloomberg>

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