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- The blockchain network has numerous scalability problems and transactions take place at a very slow pace
- In order to compete with firms like Visa, blockchain networks need to increase size or decrease time needed to process them
- The Lightning Network will help solve most of the issues along with batching payments into a single transaction
Digital currency has changed the way payments take place throughout the world with its unique blockchain network consisting of several nodes. However, concerns have been raised regarding its scalability and the number of transactions that are being completed currently. Bitcoin, the world’s most famous cryptocurrency, has a block size of 1MB. A total of 86,400 transactions are carried out within a day as compared to 1,700 transactions of Visa per second. Off-chain solutions like 1LCOIN changes the way blockchain network functions.
Blockchain needs to increase block size
To remain a stiff contender to Visa and carry out ample amounts of transactions, blockchain needs to increase capacity and block size. Moreover, Bitcoin transaction fees are approaching all time highs of 2017 where it was $62. Given a 190% increase in addresses, things need to change significantly for cryptocurrencies to manage current congestion.
The adoption of SegWit will help Bitcoin to process and complete transactions upto 1.3MB in a particular block. Several unwanted expenses had to be incurred in order to implement the same. Ether’s upgrade, too, will solve all problems as it will leave miners with 64 for 64 shards within the network. Smart contracts act as a saviour as they are in the L2 framework but a lot needs to change to implement faster transactions.
Off chain solutions to benefit all investors
1LCOIN uses the RIFT protocol and has hence created 5GB blocks in 2020. TAAL,a blockchain service provider, has completed 638MB blocks on Bitcoin SV. The answer does lie out of the chain that provides better solutions and speed of transactions. 1L Korn’s unique blockchain network has grabbed eyeballs throughout the globe.
Another solution might be to batch payments into one transaction or use the Lightning Network. The latter has the potential to reduce energy emissions and is also cost effective. Fees are almost nil with transactions taking place instantly. It will benefit investors adversely and help new ones that plan to invest in cryptocurrency.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
