The rise in Bitcoin price has been paralleled by a huge increase in demand which has effectively wrecked the Bitcoin trading infrastructure, according to a number of sources. Exchanges like Coinbase have experienced huge slowing, LocalBitcoins has stopped accepting new customer applications, and unconfirmed transactions have skyrocketed.
The price point hit peaks over $18,000, though has since scaled back. Nevertheless, demand continued to increase among exchanges. Coinbase was recently tagged as the #1 most popular app on the iTunes store, per Twitter:
Nevertheless, while demand was increasing, the power to control the exchange and provide service was slowing. In fact, so many users met with difficulty that it was covered on mainstream media. And the Coinbase Twitter account was awash with tweets of error pages.
But Coinbase wasn’t the only victim. Others fell apart as well. LocalBitcoins even went so far as to stop accepting new clients completely. In a post on the site’s Twitter feed, they made it clear that they were unable to service current clients and could no longer accept new ones.
And it wasn’t just these two sites. All across the Bitcoin landscape, transactions were slow and users were frustrated as the network experienced some of the highest trading volumes of all time. In fact, nearly 300,000 transactions were pending at one point. The Litecoin Foundation was quick to point this out:
There are 223K unconfirmed bitcoin transactions right now.. use Litecoin! pic.twitter.com/ESn3eZYoBn— Litecoin Foundation (@LTCFoundation) December 8, 2017
As adoption increases, the need for scaling to meet the massive growth in demand will only increase. The massive surge in the marketplace certainly means that response times are slow but should provide encouragement to those who are holding existing stock of Bitcoin that the bull will continue to run. Dominik Schiener, co-founder at IOTA said:
"The fact that exchanges are still struggling with scalability issues after years of development and investments into their infrastructure is a clear indication that the demand for cryptocurrencies is increasing exponentially, unexpectedly so for everyone. It is quite unfortunate that the first experience when entering the realm of cryptocurrencies is filled with frustration of congested networks and exchanges with continuous downtime, but this community still has a whole lot of growing up to do before we're ready for mainstream adoption.”
Update on Localbitcoins
After publishing, Localbitcoins announced that they had restored the registration of new clients to their site. Nevertheless, with the additional pressure of the large demand, the site remains slow. Their Twitter feed included the following:
Account registration is enabled again. We are still experiencing an exceptional load on our servers and you may notice the website being slower than usual. We apologise for the problems! #Bitcoin #LocalBitcoins— LocalBitcoins.com (@LocalBitcoins) December 8, 2017