Is bitcoin has scaling issues?

[Shwester]

Are Lightning/Sidechains just another trade off?

[Qraad]

I don't find any scaling issues.

[jseverson]

Yes it does. It can only really handle around 7 transactions on average per second. If you're wondering why fees are as high as they are right now, we're currently averaging 101.41 transactions per second.

Visa, in comparison, can handle about 10,000 transactions per second. It's pretty easy to notice the huge gap, and how Bitcoin can't really cater to the mainstream even if it wanted to.

Are Lightning/Sidechains just another trade off?

I don't know what you mean by trade off, but they're potential solutions.

[Nhebu]

Yes it does. It can only really handle around 7 transactions on average per second. If you're wondering why fees are as high as they are right now, we're currently averaging 101.41 transactions per second.

Visa, in comparison, can handle about 10,000 transactions per second. It's pretty easy to notice the huge gap, and how Bitcoin can't really cater to the mainstream even if it wanted to.

I watched what you have said in youtube already. Thanks to youtube.
Definitely, that is the problem encountering by bitcoin. A slow transaction process. Many people were disappointed in the transaction in bitcoin. The blockchain cannot handle thousands of bitcoin transaction and for us to send bitcoin fast, we need to pay a high transaction fees. Because probably the miners will get some payment in order to prioritize our transaction.
That's why lightning networks made, in order for the payment easily be done between to users with multi-signature key.
The scaling issue in bitcoin has solution.

[HeRetiK]

Are Lightning/Sidechains just another trade off?

Lightning and Sidechains are two different things.

Sidechains are separate blockchains, pegged to BTC. Lightning uses a network of smart contracts to add an additional protocol layer on top of Bitcoin.

As far as scalability is concerned, Lightning Network is the approach you should keep an eye on right now.


Trade offs, as far as I know:

1) When opening a Lightning channel you need to reserve part of your balance in advance for subsequent payments

2) Wallets of both parties need to be online when sending / receiving the transactions


There are fears of centralization in that the network will largely consolidate around bank- and cooperation-run lightning hubs. To me those fears seem largely unfounded given the low entry level to running a lightning node.

[abhishek_bittu]

The currently proposed increase in blocksize (which is heavily discussed, as it may have some interesting side effects) would raise the the maximum of transactions from 7 per second to 1,400 per second, as Matt Peoples nicely explains.
If we assume just 5 billion people on the globe being involved in any kind of transactions (no toddlers allowed) ...
... and those 5 billion do just 10 transactions per day (way too low) ...
... we end up with at least 500K transactions per second.
There are many more technical arguments like that.
But let's assume the Moore's law will take care of all that, sooner or later: yottabytes of storage in your iPhone 29++, virtually unlimited bandwith to drown in, faster than light computing (Google knows the answer before you even started the question), much improved blockchain architecture ... 

The question remains: what would be the rationale behind a "world currency"?
We know that monocultures are a risky way of approaching things. Moore's law is great, but not only in complex systems, Murphy's Law supersedes everything else (just try the external links on the Wikipedia entry: everything what can go wrong will go wrong).

Instant exchange of value doesn't need a single format. It needs a fitting exchange framework.

[budi691]

if only part of the issue, we just just watch it bro. later also seen what happens in the future. if it is seen, then we can address the issue.

[bug.lady]

The currently proposed increase in blocksize (which is heavily discussed, as it may have some interesting side effects) would raise the the maximum of transactions from 7 per second to 1,400 per second, as Matt Peoples nicely explains.

This part of your post caught my eye. Can you please explain how increasing the block size 4- or 8-fold can bring the increase of transaction count 200-fold? I am not saying I doubt your words, but I would be grateful for an explanation or a link. Thanks!

[partysumo]

The currently proposed increase in blocksize (which is heavily discussed, as it may have some interesting side effects) would raise the the maximum of transactions from 7 per second to 1,400 per second, as Matt Peoples nicely explains.
If we assume just 5 billion people on the globe being involved in any kind of transactions (no toddlers allowed) ...
... and those 5 billion do just 10 transactions per day (way too low) ...
... we end up with at least 500K transactions per second.

Are you referring to bitcoin transactions, or transactions in general? I think in any case, that figure is too high. I'd say a significantly lower number of people than 5 billion have financial transactions on any given day, and the average person definitely does not spend money on 10 different occasions on a single day.

[bug.lady]

The currently proposed increase in blocksize (which is heavily discussed, as it may have some interesting side effects) would raise the the maximum of transactions from 7 per second to 1,400 per second, as Matt Peoples nicely explains.
If we assume just 5 billion people on the globe being involved in any kind of transactions (no toddlers allowed) ...
... and those 5 billion do just 10 transactions per day (way too low) ...
... we end up with at least 500K transactions per second.

Are you referring to bitcoin transactions, or transactions in general? I think in any case, that figure is too high. I'd say a significantly lower number of people than 5 billion have financial transactions on any given day, and the average person definitely does not spend money on 10 different occasions on a single day.

You are right. I think that it would be enough if we set the goal for bitcoin to reach the current scalability level of visa/mastercard networks. They are considered to be able to process 10,000 transactions per second. 500k is not needed and much overestimated, I agree

[Pursuer]

The currently proposed increase in blocksize (which is heavily discussed, as it may have some interesting side effects) would raise the the maximum of transactions from 7 per second to 1,400 per second, as Matt Peoples nicely explains.

This part of your post caught my eye. Can you please explain how increasing the block size 4- or 8-fold can bring the increase of transaction count 200-fold? I am not saying I doubt your words, but I would be grateful for an explanation or a link. Thanks!

it won't increase it that much, not even close. and it is very easy to calculate. I will give you multiple ways:

1. consider the number of transactions per block of bitcoin. it is on average 2000 tx per block. increasing block size 8 times means 8*2000 = 16000 tx per block which is per 10 min on average so that is 26 TPS.

2. consider the number of transactions per bitcoin cash block versus the size of it. for example it is 250 tx per block which is about 120 kilo bytes. that makes every transaction ~450 bytes on average. 8 MB can hold 17777 transactions. which is 29 TPS

3. even if you take the smallest transaction size possible (meaning when people only pay to 1 address and have 1 change address and are spending one output not multiple and not a multisig) ~250 bytes that means 8 MB can contain 32000 tx which is 53 TPS and that is best case scenario that everyone is sending smallest payments possible and nobody is consolidating inputs or paying multiple recipients!

[Sky5678]

For the past decades, the financial aspect of the world has been doing great even without bitcoin. When bitcoin got introduced to some countries, the fiat currencies were also in good condition. And even when bitcoin disappears in the future, countries will still be financially stable. Bitcoin is just a cryptocurrency which can be an alternative to investment and transaction of fees. Just like the previous years when we had no idea about it, when it is gone, the financial world still keeps going.

[bug.lady]

The currently proposed increase in blocksize (which is heavily discussed, as it may have some interesting side effects) would raise the the maximum of transactions from 7 per second to 1,400 per second, as Matt Peoples nicely explains.

This part of your post caught my eye. Can you please explain how increasing the block size 4- or 8-fold can bring the increase of transaction count 200-fold? I am not saying I doubt your words, but I would be grateful for an explanation or a link. Thanks!

it won't increase it that much, not even close. and it is very easy to calculate. I will give you multiple ways:

1. consider the number of transactions per block of bitcoin. it is on average 2000 tx per block. increasing block size 8 times means 8*2000 = 16000 tx per block which is per 10 min on average so that is 26 TPS.

2. consider the number of transactions per bitcoin cash block versus the size of it. for example it is 250 tx per block which is about 120 kilo bytes. that makes every transaction ~450 bytes on average. 8 MB can hold 17777 transactions. which is 29 TPS

3. even if you take the smallest transaction size possible ~250 bytes that means 8 MB can contain 32000 tx which is 53 TPS and that is best case scenario that everyone is sending smallest payments possible and nobody is consolidating inputs or paying multiple recipients!

Sure, that was my line of thinking, thanks for clarifying that. If you increase block size n-fold, than the number of transactions the network can process increases n-fold too, and there is nothing more to that. In short, no 200-fold increases there.

[Pursuer]

-snip-

Sure, that was my line of thinking, thanks for clarifying that. If you increase block size n-fold, than the number of transactions the network can process increases n-fold too, and there is nothing more to that. In short, no 200-fold increases there.

no problem. remember that it is not exactly n-fold. it is approximately n-fold. it may be a little bigger or a little smaller because transactions are not all the same size. they can be as small as 192 byte or as big as the protocol allows (not sure what is the max size is but I have seen ~1 MB transaction in bitcoin which filled the whole block)

[Florc41]

Yes bitcoin has scaling concerns this is due to users are pretty increasing everyday accompanied by the increase of its daily transactions. The bitcoin network cannot accommodate all the transactions. The bitcoin has its block size limit to process the transactions daily this is  for the safety of the to prevent hacking into the system. 

[krishnaverma]

When we talk about scaling issues, there are a number of things to consider. Scaling issue is an exponential problem. If we compare the Bitcoin transactions with credit card transactions, the former had always been slower in comparison.

[penig]

Yes it does. It can only really handle around 7 transactions on average per second. If you're wondering why fees are as high as they are right now, we're currently averaging 101.41 transactions per second.

Visa, in comparison, can handle about 10,000 transactions per second. It's pretty easy to notice the huge gap, and how Bitcoin can't really cater to the mainstream even if it wanted to.

Some reasons Visa can handle so many transactions is because they are using a network of processors.  There is not a single super computer capturing and processing every payment, there are many systems across each country.  The vendor connects to their bank/payment processor, who records the transaction and transfers on the request for funds to the network.  Somewhere that is credited to the vendor, and your bank receives a notification to bill you.  Which happens at the end of the month, so the actual completed transaction time can be a month from this point of view (assume you pay the bill in full).  Really all VISA is doing is logging and message passing, lots of validation and secondary processes (billing, chargebacks) are happening "off chain".

Bitcoin by comparison is making complete payment between the two parties in one step as one process.  Doing this in 10 minutes is pretty incredible and with no debt/credit structures it must be completed within the window (with additional validation in confirmations, we should count at least one).

There's an irony here, bitcoin has created a decentralized data store but there is total reliance on that one store, through which every transaction must pass.  The size of the network does not change the process time, new nodes do not increase capacity.  Traditional banks have a perceived centralised model but the actual processing and handling of transactions are distributed, and as such can add systems and nodes to adjust to capacity requirements.

Long way of say, yes, Bitcoin has come scaling issues