Home
News
- New transactions cannot take place at a lightning pace due to the Bitcoin network’s limitation in scalability.
- Jeff Garzik and Gavin Andresen, two core Bitcoin developers, came out with proposals such as BIP 100 and BIP 101 in the year 2015.
- Tokenizing BTC, scaling Ethereum and using wrapped BTC are ways in which the size of Bitcoin transactions will increase and help expand its user base.
While mining for digital currencies, several hurdles come across your way. One of the problems is scalability which limits the transactions that can be performed during a period. New transactions cannot take place at a lightning pace due to the Bitcoin network’s limitation in size and frequency. Approximately, 3-7 transactions per second ca be performed through the blockchain technology. This has only increased the wait time for new users to enter the chain. It varies from hours to even days in some cases.
BTC Improvement Proposal (BIP)
Jeff Garzik and Gavin Andresen, two core Bitcoin developers, came out with proposals such as BIP 100 and BIP 101 in the year 2015. The Bitcoin Improvement Proposal (BIP) aims at increasing the block size limit. There had been a lot of discussions over its implementation but none saw the light of day. Wrapped Bitcoins on the Ethereum (ETH) 2.0 network is the best medium of reducing the scalability problem.
Once the update of POS software on the Ethereum network, users will be able to wrap Bitcoins to the former. Eventually, this will lead to the carrying out of all BTC transactions on the ETH 2.0 blockchain. Mirror transactions will be successful on peer blockchain networks which will resolve scalability. The Bitcoin community seems impressed with the proposals put forth by Andresen, the Network Lead Developer for BTC since 2010.
Steps To Increase Bitcoin Scalability
Tokenizing BTC, scaling Ethereum and using wrapped BTC are ways in which the size of Bitcoin transactions will increase and help expand its user base. Segwit has come up with an idea that will delete unwanted files and increase the block size up to 4mb. Furthermore, the issue can be resolved if transaction malleability is removed.
It will make transactions on the BTC network much faster and cheaper. It is a new mechanism fresh off the blocks which will take time to be implemented. The technical add-ons can increase the number of transactions it can process per second. Once data is processed off the chain, it will enhance user experience in terms of the number of transactions and size.
Mr. Pratik chadhokar is an Indian Forex, Cryptocurrencies and Financial Market Advisor and analyst with a background in IT and Financial market Strategist. He specialises in market strategies and technical analysis and has spent over a year as a financial markets contributor and observer. He possesses strong technical analytical skills and is well known for his entertaining and informative analysis of the Financial markets.
