ZoneBitcoin EditorialThe "scalability" ( the word scale up ) is an Anglicism which means “scalability”. When we talk about scalability, we refer to the idea of scaling. So, when we talk about the “scalability” of Bitcoin, we are talking more precisely about its ability to be used on a larger scale.
However, very quickly, we realized that on a larger scale of use, Bitcoin has limits. These are the limits that we consider when we talk about “the problem of scalability”.
However, and this is above all what must be remembered: thebitcoin ecosystem works continuously to try to improve the network. There is also a process for submitting proposals called “Bitcoin Improvement Proposal (BIP)which allow discussion on the solutions proposed.
In this article we will see the scalability problems as well as the solutions provided by the bitcoin community.
What are the limits of Bitcoin?
The first limit concerns transaction time. The Bitcoin network processes a limited number of transactions. Transactions are verified by the nodes of the decentralized network to record them on the blockchain. These transactions are verified during what is called “mining”. Miners compete to solve the Bitcoin algorithm. It is then whoever solves the problem first who will receive the reward for their work. This reward is paid in the form of BTC. Thus, transactions are recorded while avoiding problems of “double-spend".
However, blocks are generated approximately every 10 minutes. The “block time” is therefore relatively slow for mining a block. Thus, the network can process up to 7 transactions per second (TPS). For comparison, Ripple can process 1500 and VISA can process more than 24,000 for example. This is therefore the first limitation.
The second limit is that concerning the size of the blocks. Bitcoin blocks weigh 1 MB. Each transaction weighs at least 250 bytes.
The third limitation concerns fees. The more transactions there are to process on the blockchain, the more
How is Bitcoin Scalability Problematic?
If we want mass adoption of bitcoin, i.e. use in daily life, scalability is indeed problematic.
It is not possible to pay, for example, for a coffee with the network Bitcoin, as things currently stand. It would take too long and be more expensive...
Meanwhile, VISA processes more than 150 million transactions per day on average. This is impossible for the Bitcoin network or Ethereum (ETH) as it is (even after updating, The Merge).
However, security and speed are crucial elements for a payment network. The scalability of Bitcoin must be “worked” then to be able to resolve the problems.
Proposals to improve Bitcoin
As we saw in the introduction, the community has tools and processes so that everyone can participate and propose new ideas and solutions. This process is known in the form of “Bitcoin Improvement Proposal (BIP)” which are written proposals submitted to the community as a whole. Updates and solutions to resolve scalability issues are submitted in the form of BIPs for discussion and concluded with votes.
In 2017, the Bitcoin ecosystem made the decision to activate like soft fork SegWit. In summary, SegWit consists of separating (segregating) the data (witness) for the verification of valid transactions, from the list of entries (input). You should know that SegWit made possible the creation of upper layers (layers 2) on the Bitcoin network.
This opened the way to several options to improve the scalability of bitcoin. For example, this made possible the use of solutions of second layers (layers 2) which are very relevant for the network.
🎓—->Read the article to understand the functions of layers 2
However, this is not the only option and here is an overview of the solutions that have been proposed.
The good news is that many solutions have been provided. There have been several schools and currents regarding the resolution of the scalability of bitcoin. Some people wanted to increase the block size. This solution has been created and it is Bitcoin Cash (BCH) which was created on this occasion.
The other trend consisted of putting in place solutions to achieve off-chain transactions. This consists of being able to add additional protocols on higher layers. This is very close to the structural system of the Internet.
The proposal to increase the size of the block
This is a solution that may seem obvious but which raises questions. The size of Bitcoin being fixed at 1 MB, one of the solutions BIP102 proposed by Jeff Garzik (co-founder of Bloq) was to double the size. The proposal was rejected by the majority of members of thebitcoin ecosystem because it could only be a bandage on a wound. The consequences could worsen bitcoin in the future with this proposal. This could ultimately burden the network and require larger mining machines.
The proposal to reduce mining time.
A known bitcoin developer (Sergio Lerner) was the defender of this proposal. This consists of reducing the frequency of creation of new blocks which are added to the blockchain. Instead of a creation every 10 minutes, Sergio Lerner proposed reducing it to 5 minutes. There "Bitcoin Improvement Proposal” (BIP) was also rejected because the time of 10 minutes is important to maintain a decentralized network powerful. Likewise, this would not sufficiently solve the scalability problem. With millions of people using Bitcoin, the problem would be the same as what we know today.
The 5 most “successful” proposals to solve the problem of Bitcoin scalability
➡️ The proposal of Segregated Witness (SegWit)
The BIP141 proposal from Segregated Witness consists of carrying out smaller transactions (and not increasing the size of the blocks). This reduces the information added on each transaction. This makes it possible to double or even quadruple the number of transactions recorded in the same block.
This proposal was widely accepted and resulted in a soft fork on August 24, 2017. It was thanks to Segwit that the “malleability of transactions” was resolved. This then allowed the possibility of implementing the Lightning Network, which is a layer 2 solution.
➡️ The creation of the Lightning Network
Among the layer 2 solutions, the Lightning Network is one of the best known and most appreciated solutions by the bitcoin community. This was also the Bitcoin Improvement Proposal the most debated and enriched over time. It is a second-layer payment protocol that works on top of the Bitcoin network. It is based on a network of bidirectional payment channels and this allows micro-transactions to be carried out with reduced fees (of the order of 1 satoshi).
➡️ The creation of dynamic blocks
Rather than proposing a fixed increase in block size, a proposal was made to be able to vary the block size. The variation would then be conditioned by the change in mining difficulty.
➡️ The proposal for “Inversible Bloom Lookup Table (IBLT)” and “weak blocks”
This proposal aims to optimize the time required for information to be propagated between nodes.
➡️ Creating sidechains
The sidechains proposal is certainly the one that has been the most popular and most used currently (and in particular on other blockchains). Sidechains, as the name suggests, are chains created in parallel with a network. They have specific rules but are linked to the main blockchain. This then helps reduce the load on the network while carrying out operations on the sidechain.
From a technical point of view, it is not Bitcoin in itself that is improved but it improves it indirectly.
—> Read our article on Layers 2.
Who are the people working to improve the Bitcoin network?
You may now ask yourself who are the people behind these proposals? We recommend that you first read our article to find out the different players in the Bitcoin ecosystem.
La Bitcoin community is large and continually growing. It remains fundamentally open source software. Thus, all people who wish can work and participate in its (proper) functioning, particularly through the BIP .
Many people do it altruistically, simply, for the common good. Some do it voluntarily (this was especially true at the beginning). There are also companies that work to constantly improve Bitcoin as Blockstream ou At five for example.
So, there are thousands of people thinking about bitcoin issues together. The proposals are then put together for collective debates. Decisions can sometimes be slow, but implementations are real. Updates are constantly made to the network in order to make it ever more robust and ever more scalable.
Final Word on Solving the Bitcoin Scalability Problem
The problem of the scalability of Bitcoin is therefore not a closed matter but is still under constant discussion. In the history of bitcoin, there have been many debates and proposals to allow greater scalability of bitcoin.
Likewise, there was even a event dedicated to the improvement of Bitcoin which has not taken place since 2019. It was “ScalingBitcoin.org” and the last edition was held in Tel Aviv in 2019. However, on dedicated forums like Github, anyone can still submit a “Bitcoin Improvement Proposal” to debate and discuss the improvement of Bitcoin. All the Bitcoin community working to ensure that the software continues to function ever more optimally.
In any case, what we must remember about the scalability of bitcoin is that it pushes the network towards continuous improvement. This makes the network ever more powerful and ever more efficient. It is also the promise of Bitcoin, as the ultimate means of payment for all and for all that is at stake. Mass adoption is only a matter of time if we judge the enormous progress that has been made. accomplished.
We hope this helps you see things more clearly. Do not hesitate to read our beginner's guide to bitcoin, and browse the different sections of this blog to learn more.
👨🎓 Read other articles in the education section:
- What you need to know about the actors of the Bitcoin network (bitcoin community)
- Know what the “Bitcoin Improvement Proposal (BIP)
- Understand layers 2 and their roles.
- Testnet and Mainnet: Understanding the difference
- Centralized and decentralized network: What you need to know
- Craig Wright can't be (yet) Satoshi Nakamoto
