HomeNewsCrypto Bitcoin Experiencing Network Delays, What Can You Do?The way things are going, the digital currency Bitcoin will start to malfunction early next year.Transactions will become increasingly delayed, and the system of money now worth $3.3 billion will begin to die as its flakiness drives people away.So says Gavin Andresen, who in 2010 was designated chief caretaker of the code that powers Bitcoin by its shadowy creator.Andresen held the role of “core maintainer” during most of Bitcoin’s improbable rise; he stepped down last year but still remains heavily involved with the currency (see “The Man Who Really Built Bitcoin”).Andresen’s gloomy prediction stems from the fact that Bitcoin can’t process more than seven transactions a second.That’s a tiny volume compared to the tens of thousands per second that payment systems like Visa can handle—and a limit he expects to start crippling Bitcoin early in 2016.It stems from the maximum size of the “blocks” that are added to the digital ledger of Bitcoin transactions, the blockchain, by people dubbed miners who run software that confirms Bitcoin transactions and creates new Bitcoin (see “What Bitcoin Is and Why It Matters”).Andresen’s proposed solution triggered an uproar among people who use or work with Bitcoin when he introduced it two weeks ago.

Rather than continuing to work with the developers who maintain Bitcoin’s code, Andresen released his solution in the form of an alternative version of the Bitcoin software called BitcoinXT and urged the community to switch over.bitcoin rechargeIf 75 percent of miners have adopted his fix after January 11, 2016, it will trigger a two-week grace period and then allow a “fork” of the blockchain with higher capacity.bitcoin cooling solutionsCritics consider that to be a reckless toying with Bitcoin’s future; Andresen, who now works on Bitcoin with the support of MIT’s Media Lab, says it is necessary to prevent the currency from strangling itself.bitcoin usd value graphHe spoke with MIT Technology Review’s San Francisco bureau chief, Tom Simonite.How serious is the problem of Bitcoin’s limited transaction rate?It is urgent.sell bitcoin to inr

Looking at the transaction volume on the Bitcoin network, we need to address it within the next four or five months.As we get closer and closer to the limit, bad things start to happen.bitcoin mining pool chartNetworks close to capacity get congested and unreliable.ethereum price july 2016If you want reliability, you’ll have to start paying higher and higher fees on transactions, and there will be a point where fees get high enough that people stop using Bitcoin.Why take the provocative step of releasing an entirely new version of Bitcoin?It was a difficult decision.I’ve been lobbying pretty hard behind the scenes for the last eight months, but  was having trouble even getting developers to agree that there was a problem.I had to go public and actually release the code and let people essentially vote with their feet.Now that we’ve done that I think you see people finally coming around to the idea that this is a high priority problem.

I’m not happy that it had to come to that, but I think in the long run it will be a good thing.Some major Bitcoin companies have endorsed your proposed way of increasing the block size, and some miners have even adopted BitcoinXT.Other companies and prominent Bitcoin developers have attacked your move, and suggested alternative solutions—not all backed by working code—that are rapidly gaining support.What’s happening?It’s somewhat chaotic.There’s no well-defined process for coming to a decision about changes to Bitcoin and there’s no one correct answer for how to solve this problem.Things are pretty messy – but that’s by design.There’s no central committee.There’s no single person making these decisions for Bitcoin; it takes consensus among the people running the software.It’s a good thing that decisions like this are really hard to make happen.Do you think that consensus can be reached?It’s pretty clear that the maximum blocksize is going to increase.I don’t know exactly how or exactly when.

I don’t think it’s clear yet that my proposal will generate enough consensus among miners and the other ecosystem players.What will happen if nothing is done?Transactions will get unreliable and it’ll get worse and worse over time.My fear is there’ll be no critical event that causes people to react—Bitcoin just kind of has a long slow death.I’m trying to set off alarm bells for ‘You know, guys, if we don’t do this, Bitcoin will be dead in four years.’ It’s not easy to sell that, especially when there’s so much controversy.If BitcoinXT activates, it will recognize existing Bitcoins.But not new Bitcoins created by miners who don’t switch.Is that dangerous?It’s pretty hard to get left behind.Once the Bitcoin core software sees that 50 percent of mining power has upgraded and you haven’t, it’s going to warn you that you need to upgrade.It would be awfully difficult to be taken by surprise.The economic incentives to switch would be so strong—you want your Bitcoins to be the same Bitcoins that everyone else is using.How widely established is Bitcoin now anyway?It’s firmly established in a few niche areas and growing there.

An early use case is people who pay international contractors in Bitcoin because it’s easier than figuring out how to transfer dollars into local currency.The major barrier to it going mainstream anywhere is there has to be some way of getting Bitcoin as part of your normal activity.Until part of your paycheck is regularly paid in Bitcoin, I’m not sure how it would really go mainstream.I can imagine places in the world where there are not functioning banking systems, or payroll systems, where it could go mainstream first, because you’re not trying to replace the way people are already doing something.I still say do not invest your life savings in Bitcoin.It is still an experiment and it could still fail.Become an MIT Technology Review Insider for in-depth analysis and unparalleled perspective.The number of transactions on the Bitcoin network has steadily increased over the years.This means more blocks are filling up.And as not all transactions can be included in the blockchain straight away, backlogs form in miners’ “mempools” (a sort of “transaction queue.”) Miners typically pick the transactions that pay the most fees and include these in their blocks first.

Transactions that include lower fees are “outbid” on the so called “fee market,” and remain in miners’ mempools until a new block is found.If the transaction is outbid again, it has to wait until the next block.This can lead to a suboptimal user experience.Transactions with too low a fee can take hours or even days to confirm, and sometimes never confirm at all.But here is what you can do today to keep your own transaction from getting stuck.For the first years of Bitcoin’s existence, most wallets added fixed fees to outgoing transactions: typically, 0.1 mBTC.Since miners had spare space in their blocks anyways, they normally included these transactions in the first block they mined.(In fact, transactions with lower fees or even no fee at all were often included as well.)With the increased competition for block space, a fixed 0.1 mBTC fee is often insufficient to have a transaction included in the next block; it gets outbid by transactions that include higher fees.While even a low fee transaction will probably confirm eventually, it can take a while.

If you want to have your transaction confirmed faster, the obvious solution is to include a higher fee.If your wallet (by default) includes an insufficient fee, you may be able to adjust the fee manually, either as part of the wallet settings, or when you send a transaction.Websites like 21.co monitor the network and suggest how much of a fee you should include per byte, as well as how fast you can expect your transactions to confirm at different fee levels.If you need the payment to go through in the next block or two, you need to pay a higher fee.For less urgent payments, you can include a lower fee; it will just take a bit longer to confirm.Check if your wallet includes dynamic fees These days, most wallets support dynamic fees.Based on data from the Bitcoin network, these wallets automatically include a fee that is estimated to have a transaction included in the next block, or maybe in one of the first blocks after that.Some wallets also let you choose the fee priority.Again, higher fees let your transactions confirm faster, lower fees could make it take a bit longer.

If transactions from your wallet are often delayed during peak hours, and you have no option to adjust to higher priority fees, your wallet is most likely outdated.Check if there is an update available, or switch to a new wallet.If you do switch to a new wallet, you of course need to transfer funds from your old wallet to your new wallet.If you’re not in a rush and don’t mind paying the fee, you can just send it from your old wallet to the new wallet through the Bitcoin network.It will probably arrive eventually — even if the fee is low.If you are in a rush, some wallets allow you to export your private keys or the private key seed, and then import them into the new wallet.This requires no transaction on the Bitcoin network.From the new wallet, you can immediately start transacting.If you’ve already sent a transaction and it gets stuck, that transaction can, in some cases, be made to “jump the queue.” The easiest way to make your transaction jump the queue is using an option called Opt-In Replace-by-Fee (Opt-In RBF).

This lets you re-send the same transaction, but with a higher fee.In most cases, when the same transaction is re-sent over the network, but with a higher fee, the new transaction is rejected by the network.Bitcoin nodes typically consider this new transaction a double spend, and will therefore not accept or relay it.But when sending a transaction using Opt-In RBF, you essentially tell the network you may re-send that same transaction later on, but with a higher fee.As a result, most Bitcoin nodes will accept the new transaction in favor of the older one; allowing the new transaction to jump the queue.Whether your new transaction will be included in the very next block does depend on which miner mines that next block: not all miners support Opt-In RBF.However, enough miners support the option to, in all likelihood, have your transaction included in one of the next couple blocks.Opt-In RBF is currently supported by two wallets: Electrum and GreenAddress.Depending on the wallet, you may need to enable Opt-In RBF in the settings menu before you send the (first) transaction.

If your wallet does not support Opt-In RBF, things get a bit more complex.Child Pays for Parent (CPFP) may do the trick.Applying CPFP, miners don't necessarily pick the transactions that include the most fees, but instead pick a set of transactions that include most combined fees.Without getting into too many technical details, most outgoing transactions do not only send bitcoins to the receiver, but they also send “change” back to you.You can spend this change in a next transaction.Some wallets let you spend this change even while it is still unconfirmed, so you can send this change to yourself in a new transaction.This time, make sure to include a high enough fee to compensate for the original low fee transaction.A miner should pick up the whole set of transactions and confirm them all at once.If your wallet does not let you select which bitcoins to spend exactly — meaning you cannot specifically spend the unconfirmed change — you can try spending all funds in the wallet to yourself; this should include the change.

Like Opt-In RBF, not all miners currently support CPFP.But enough of them do to probably have your transaction confirmed in one of the next blocks.If neither Opt-In RBF nor CPFP are an option, you can technically still try and transmit the original transaction with a higher fee.This is typically referred to as “full replace-by-fee,” which some miners accept.However, publicly available wallets currently do not support this as an option.Otherwise, you may just have to wait either until the transaction confirms or until the bitcoins reappear in your wallet.It’s important to note that until a transaction confirms, the bitcoins are technically still in your wallet — it’s just that it often doesn’t appear that way.The bitcoins are not literally “stuck” on the network and cannot get lost.Update: Since completion of this article, mining pool ViaBTC started offering a “transaction accelerator”.If your transaction is stuck and includes at least 0.1 mBTC fee per kilobyte, you can submit the transaction-ID to ViaBTC, and the pool will prioritize it over other transactions.