Scaling

Written by Max Hinchman

Introduction

Scaling refers to the limits of number of transactions a network can process. Issues associated with scaling can arise from growth in the network, security issues and general issues with code. Scaling issues are based on issues with validation/throughput and security.

Validation latency refers to the time it takes for submission to confirmation of a transaction on a network. For cryptocurrencies that hope to gain mainstream adoption, this is a critical component. Bitcoin currently creates a new block every ten minutes and handles roughly three to four transactions per second. Bitcoin currently handles about 3 to 4 transactions per second, Ethereum about 15 and Litecoin 56. In this regard, blockchain networks lag significantly behind Visa, who process roughly 2000 to 4000 transactions per second.

Various solutions have been proposed to improve blockchain scalability. On-chain solutions consist of technical upgrades such as implementing Segregated Witness (SegWit) in bitcoin, or increasing the block size which led to the contentious hard fork creating Bitcoin Cash. Off-chain solutions such as Bitcoin's lightning network look to move transactions off-chain while still using the base layer for security.

Another issues associated with blockchain scaling has to do with security. A core value proposition of blockchain networks versus traditional database systems is that blockchain networks can be much more secure. Bitcoin’s 1MB block size limit was a means of protecting itself from denial of service (DOS) attacks. When blockchains explore scaling options, many current solutions do so at the expense of security. Therefore ideology and ethics are common themes that have arisen throughout the history of block size debates.

Suggested Reading

Blockchain’s Scaling Problem, Explained by Connor Blenkinsop

Scaling Issues Faced by Different Cryptocurrenciesby CoinBundle