The fight between backers of XT and the original version, now called Core, has been ugly. It has raged on Reddit and social media, users have been tossed off message boards, and there have been anonymous cyberattacks on users and companies. XT started off strongly, but hasn’t gotten near gaining a consensus for change.

?This stalemate is what finally convinced Mr. Hearn that bitcoin was fatally collapsing in on itself. Others are more hopeful.

Yet another proposal, this one called Bitcoin Classic, has emerged from the ashes of the XT/Core debate. It is a version of bitcoin that would allow for a two-megabyte limit, with rules put in place to raise it over time. It appears to be quickly winning support.

“Sometimes it takes a crisis to get everyone in a room,” said Fred Wilson of Union Square Ventures, a venture-capital firm with bitcoin investments, in a philosophical blog post. “That may be how the block-size debate gets settled.”

Eoin Treacy's view

If Bitcoin, and more importantly blockchain, are going to move from niche to mainstream they need to evolve. That means the size of the blocks needs to be bigger and the distributed nature of the mining effort needs to be preserved. Purists are unlikely to be happy with any compromise but the reality is that if the cryptocurrency is to realise its potential it will have to happen. 

There is also the possibility that the upcoming revaluation of the currency, slated for July, is putting some business models under pressure which is also contributing to the stress in the market. Despite the headlines Bitcoin is still trading above its 200-day MA and a sustained move below it would be required to question medium-term demand dominance.