Scalability is a word that should most likely have come across on our journey into cryptocurrency.
Scalability is the ability of a system to conviniently expand and accommodate growth and increase in scale
A basic example would be the human stomach, it's an organ that comfortably expands to accommodate as much food as we can take in, and never does it get to point that stomach all the way to oesophagus gets filled and we can take in no more.
Scalability issue is faced in may technologies and businesses and it comes in different forms and the blockchain technology, more specifically, the bitcoin blockchain technology, is not an exception.
Unlike the human system which disposes of food as waste, every transaction made on the blockchain is stored on the system.
Bitcoin transactions operate on a POW algorithm and are confirmed by miners, who compete individually for the confirmation of the next block in the chain until the transaction is completed. The block size is 1MB, and that's the amount of transactions that can be stored in it.
Bitcoin has grown in popularity over the years and this has lead to increased adoption and higher number of transaction requiring confirmation.
So basically a limited block size is used to accommodate an infinitely growing number of transactions.
This has lead to lagging and low tps (transaction per second); scalability issues. And the blockchain can only handle 7 transactions per second.
Solutions to bitcoin's Scalability Problem
A lot of suggestions has been put forward to solve the scalability problem of bitcoin
- Hard (or soft) Fork
- Segregated Witness (segwit)
- Lightening network and more,
Hard fork is a splitting of a block into two separate chains. We have hard and soft fork, a hard fork is one whose transactions can not be recognized by the parent chain, (a complete split) while a soft fork can be recognized by the parent chain.
Bitcoin Cash was a hard fork of bitcoin which was split in 2017, and increased the bitcoin blocksize to 8MB and was a temporary solution to the scalability problem.
Segwit and the lightening network are whole topics of discuss and would require a separate post
They have been touted as a permanent solutions to bitcoin's scalability. They are both yet to be fully launched on the system.