Blockchain scalability is currently the biggest challenge for the cryptocurrency
Blockchain scalability is currently the biggest challenge for the cryptocurrency space, especially for the pioneer’s Bitcoin. Bitcoin’s block verification rate is lowest among its peers at 10 minutes, and the scalability problem is only going to intensify if a proper solution is not thought out correctly.
There have been certain suggestions from different corners, including reducing the block size, but there are not many takers for that idea. The main reason being that the core team doesn’t want to alternate the original Satoshi’s protocol and design. The idea of reducing the block size was proposed during a Satoshi roundtable meeting, by only one of the members, and while the community members got excited, but the majority from the core team called it impractical and not worth investing upon, including Roger Ver, who is on the other side of the chain, and wants the block size to be expanded to include the increasing demand.
For now, Bitcoin is sticking to an off-chain solution in the form of The Lightning network which is still under development. While many flag bearers of the Bitcoin community has been affirmative of the current of-chain solution and believes once completely developed, the LN network could help the Bitcoin Blockchain a significant portion of the transactions to be verified on the LN network, thus solving the scalability issue.
However, the early implementation of the LN network has been far from convincing and as the days pass more people are voicing their concern over the technical flaws in the network and the level of centralization which might be the perfect recipe of disaster.
So, the obvious question is which is a better solution for scaling crypto blockchain network, is it either by reducing the block size or increasing it. Let us analyze both the cases and see what we can conclude.
You May Also Read: Can You Write Off Losses on Bitcoin?
Bitcoin Cash and The Increased Block Size
Bitcoin Cash hard-forked from the Bitcoin network mainly because of the scalability issues and there reluctance to make changes to the core protocol to help the pioneers scale at a level of the competition.
Bitcoin Cash is lead by Roger Ver, who believes the end goal should be an efficient network which is fast enough for the users so that they can rely on it over the traditional platforms.
BCH network decided to expand its block size from 1 MB to 8 MB since it allows for more number of transactions to be verified at once. The network did not just stop there, after their hard-fork from the main network over increasing block size, the network again expanded its block size to 32 MB in 2018, to accommodate new features like smart contracts and tokenization.
However, many believed that increasing block size does not make sense if you can’t achieve that block height. They were right for the most part as the BCH never really reached the block size of 8 MB, but that is mainly because of BCH usability and transactions are not as high as Bitcoin.
Bitcoin is still the crypto king and dominates the transaction charts all around the globe on almost every crypto exchange. While BCH is currently new and does not even come close to the transaction volume of Bitcoin, but the increased block size has definitely helped the network to scale way better than Bitcoin.
The faster transaction speed also impacts the transaction fee, while Bitcoin charges a significant amount for every transaction, which is quite low when compared to the traditional player like Visa and MasterCard, but still quite high by decentralized space standards.
You May Also Read: Can AI And Blockchain Combine Forces To Control Fake News?
The Block Size Reduction Debate
The Block size reduction has come up recently during one of the Satoshi round table meetings and the idea was not really supported by the majority of the developers as they called it unfeasible and impractical.
If we think of it, the main thinking behind reducing the block size is that it would consequently reduce the block time from 10 minutes to a lot less. But, at the same time, the number of transactions getting verified would be reduced significantly as well.
For a network like Bitcoin whose usability is increasing every day, reducing the block size would create more problems than it would solve, and the cost of implementing such a change is quite expensive.
The Bitcoin Block Time of 10 minutes was mainly fixed to avoid hash power manipulation by miners, so the core developers maybe look to make changes in the mining consensus, which could be a better help, or maybe reduce the block time by reducing the mining difficulty.
Whatever may be the actual solution, but reducing the block size and the off-chain Lightning network does not look promising at this point in time. Let us just hope that the Lightning network actually turns out the way many who believes it would, once completely developed.
Here Are Few Articles For You To Read Next: