Bitcoin nears record high price after 'milestone' in fierce debate over its future

• The price of bitcoin traded near its all-time high.
• A key milestone in the so-called "scaling debate" which has been consuming the bitcoin community was reached.
• But some in the bitcoin space said there are more hurdles to jump over yet.

Bitcoin traded near its all-time high price late on Thursday after the intense debate over the cryptocurrency's future appears to be heading to a positive end.

The price of bitcoin hit a high of $2,948.51 on Thursday evening, just shy of the record high $3,025.47 reached on June 11, according to data from CoinDesk.

While the price pulled back over the next couple of hours, it is significantly higher than the $2,294.40 handle it began trading at on Thursday morning. Bitcoin has taken a hit in recent days because of the uncertainty over its future.

What's been going on?

Within the bitcoin community, a so-called "scaling debate" has been going on. There is a big backlog of transactions on the bitcoin blockchain — the technology that underpins the cryptocurrency. That's because the bitcoin code only allows a certain number of transactions through in one "block".

To understand this, it's important to outline how transactions work. Transactions by users are gathered into "blocks" which is turned into a complex math solution. So-called miners, using high-powered computers work these solutions out to determine if the transaction is possible. Once other miners also check the puzzle is correct, the transactions are approved and the miners are rewarded in bitcoin.

The whole debate has been about the right way to increase the block size, therefore speeding up transactions.

Who's fighting? 

One faction of miners were supporting a solution called BIP 148, which would induce a "fork" in the blockchain. This would mean there were two separate blockchains and therefore two separate bitcoin tokens.

Another group threw its support behind a proposition called BIP 91, which would introduce something known as SegWit2X to the blockchain. SegWit is short for "segregated witness" which would move some of the data outside the main bitcoin network to increase its capacity. This was received negatively by some miners because it would lead to less fees for them.

But now the miners have accepted the BIP 91 proposal which would increase the block size.

What next?

The new code update called BIP 91 has been locked in with 93.8 percent of miners showing support for the proposal in the last 24 hours, according to Coin Dance, a site which tracks bitcoin blocks.

It is essentially a software update that miners need to run. So 93.8 percent of miners are signaling their intention to run it.

There will now be a two-day grace period for miners to prepare for the activation of BIP 91. Following that, there will be an adjustment period which could take two weeks. The actual increase of the block size might not take place until November.

And there could be some potential issues. For example, one bitcoin developer Bryan Bishop, said that miners might not upgrade their software, even though they are signaling that they will.

TWEET

And there is still a bit of caution in the market.

"It's premature to say the worst is over. But we have reached one important milestone down the road in bitcoin scaling. And there are a few more milestones coming up," Bobby Lee, CEO of BTCC, a bitcoin exchange told CNBC by phone on Friday.

WATCH: Here's what sets Ethereum apart from its rival Bitcoin