Bitcoin Can’t Stop Breaking Things: When bitcoin futures trading went live on Sunday night, there were sniggers from the cryptocurrency community after Cboe’s website was instantly knocked offline.
“Welcome to bitcoin,” went the refrain. Disruption of service is all part of daily life at several of the web’s largest bitcoin exchanges. In the last 24 hours, Coinbase and Bitfinex have both reported problems, transaction fees have reached record highs, and Ledger has also been overwhelmed. Bitcoin just can’t stop breaking things.
Amidst breaking new price records, bitcoin has been busy wreaking a trail of destruction across the internet. Nary a week passes without the runaway currency overwhelming servers, downing exchanges, and piling up transactions in the mempool.
It’s not so much the transaction volume which has been causing issues this week as the average fee, which is now as high as $24, with a median of $15. This hasn’t dampened enthusiasm for the crypto gold rush however. It took the cryptocurrency market 24 days to grow from $200 billion to $300 billion and then 10 days to swell to $400 billion.
Today, that figure stands at $500 billion – yes, half a trillion – and it took just five days to get there. Bitcoin’s rising dollar value, coupled with a huge upswell in litecoin and ethereum trading, has helped push the markets over that threshold.
The latest milestone hasn’t come without considerable pain however. Bitfinex was down for a couple of hours on Tuesday due to a reported DDoS, something which is becoming a regular occurrence there.
Coinbase, meanwhile, was forced to halt ethereum and litecoin trading for a spell on Tuesday, citing a “major outage”. Not to be outdone, hardware wallet manufacturer Ledger also complained of strain, tweeting: On the darknet, users have been moaning for weeks of rising fees that have rendered markets largely unusable for smaller purchases.
Monero has been the obvious payment alternative, though users of Reddit’s r/darknetmarkets have also taken to the forum requesting sites that accept bitcoin cash, ethereum, and litecoin. The difficulty of sending small quantities of bitcoin was illustrated on Off Chain with Jimmy Song on Tuesday evening. Roger Ver was guest of the show, where he demonstrated sending $10 of bitcoin and bitcoin cash respectively. The former cost around $15 in transaction fees; the latter one third of a cent.
The Perfect Storm
Infrastructure problems haven’t slowed bitcoin’s ascent: the virtual currency has been a raging bull for weeks, and there are no signs of it pausing for breath. But it’s had to content itself with sharing the headlines with litecoin this week, whose remarkable ascent has been attributed to the perfect storm of circumstances.
Reports of deposit and withdrawal difficulties at Bitfinex have played their part, and high bitcoin fees certainly haven’t helped. Accelerated fees for bitcoin transactions are currently around $25. For the same price five days ago you could have bought a quarter of a litecoin.
As the only remaining ‘cheap’ coin on Coinbase, and one of the few sub-$100 alts in the cryptocurrency top 10, it was inevitable that litecoin would rise sooner or later. Traders seem sceptical that LTC can hold its price, however, with Mike Novogratz telling CNBC:
“I don’t think it will have the same legs that bitcoin would. I would sell it here versus buying bitcoin.”
Few would begrudge litecoin its moment to shine though. Every dog has its day and every coin has its week. The ‘chikun’, as litecoin is affectionately known, has flown to the moon and stars. Soon, it will surely come home to roost.