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Bitcoin scalability problem

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The Bitcoin scalability problem is due to the fact that Bitcoin blockchain blocks are limited to one megabyte in size.[1] Bitcoin blocks carry all of the transactions on the Bitcoin network that have been processed during the previous ten minutes. The one megabyte limit has created problems for bitcoin transaction processing, such as increasing transaction fees[2] and delayed processing of smaller transactions that cannot be fit into a block[1][3]

The two leading contenders as solutions to the Bitcoin scalability problem are Bitcoin Unlimited and Segregated Witness (SegWit).[3] The Bitcoin community is sharply and acrimoniously divided between adoption of either of these solutions.[3] Bitcoin Unlimited would initially increase the blocksize to 2 megabytes, with no limit on subsequent increases.[3] SegWit would fix the Bitcoin malleability bug, allow for an effective blocksize of at least 2 megabytes, and allow for implementation of the Lightning Network on the Bitcoin network.[3]

Bitcoin Unlimited would require a hard fork, requiring a supermajority of 95% of Bitcoin miners to approve, but would shift the governance of Bitcoin from Bitcoin Core to a democratic process.[4][5]. SegWit could be implemented by a soft fork, but would only be a temporary solution, because eventually further blocksize increases by a hard fork would be required.[3] The Lightning Network could only be implemented through trusted third parties.

In early May 2017 Litecoin adopted SegWit, [6] and not long thereafter began implementation of Lightening Network.[7]


See also

References

  1. ^ a b "Block size limit controversy". Bitcoin Wiki. April 11, 2016. Retrieved 2017-05-17.
  2. ^ "Transaction fees". Bitcoin Wiki. May 11, 2017. Retrieved 2017-05-17.
  3. ^ a b c d e f Torpey, Kyle (April 5, 2017). "A Compromise Over Scaling Bitcoin Doesn't Make Sense". Crypto Insider. Retrieved 2017-05-17.
  4. ^ Hertig, Alyssa (25 September 2016). "A Controversial Bitcoin Alternative is Seeking a Comeback". CoinDesk. Retrieved 17 January 2017.
  5. ^ Aaron van Wirdum (13 January 2016). "Unlimited, Classic and 'BitPay Core': Bitcoin's New Kids on the Blockchain". Bitcoin Magazine. BTC Inc. Retrieved 18 January 2017.
  6. ^ https://twitter.com/Blockstream/status/862420329888595969
  7. ^ Russell, Rusty. "Lightning on Litecoin". Blockstream. Retrieved 12 May 2017.
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