This is the Cato Daily Podcast for Monday, August 24, 2015.

I'm Caleb Brown.

Bit coin is about to be torn asunder facing an identity crisis, in other words, an existential threat.

Or maybe it's a software upgrade that would facilitate more transactions.

Jim Harper is a senior fellow at the Cato Institute and a member of the Board of Directors at the Bitcoin Foundation.

He says the tales of Bitcoin's imminent demise may be overblown.

Bitcoin is a software protocol that's like email,

in the same way that email allows you to send a piece of mail

digitally across the internet. The Bitcoin protocol actually operates a public

ledger, a book in which you can track transactions. The ledger is not

owned by anyone, it's operated purely by software, but it's analogous, again, the way email is to mail,

Bitcoin is to a ledger. The ledger is optimized for recording transactions in which value is exchanged in the form of these things called

Bitcoin's.

The way the software is written right now, the number of Bitcoin's, sorry, the number of

of transactions that can occur

per second is about seven and that's because the ledger pages are limited to 1 megabyte.

That relatively low number, 7 transactions per second,

may actually cause trouble for the network starting next year 2016 or in early 2017 when the number

of transactions rises and bumps up against that limit.

So some leading developers of Bitcoin have determined that they should push a change to the software.

The change is a hard fork because in the future people running the current software won't have

compatible interaction with the with the future software. So that's known as a

...