News

BitMex Research shines Light on Bitcoin’s Scalability Issues

0

With the increased popularity of cryptocurrencies and blockchain, the number of transactions that need to be processed has risen significantly. This has put first generation cryptocurrencies like Bitcoin and Ethereum amidst something called the scalability problem. In simple terms, scalability in cryptocurrencies is the number of transactions the blockchain can process.

Cryptocurrencies like Bitcoin use blocks to record and process transactions. Initially the block size for Bitcoin was limited to 1 MB which means it could only process a limited number of transactions in every block.  As the demand for Bitcoin as a mode of payment grows, the limited block size resulted in transactions taking much longer to process with the added disadvantage of higher transaction fees.

This issue has been a major concern that could justify the future of Bitcoin. This issue was discussed in a recent report published by the research arm of the cryptocurrency exchange BitMex. 35 initial block downloads (IBDs) were conducted and the time taken by the nodes to synchronize with the network was recorded.

As per the results, there has been a “considerable and consistent improvement in the performance of the software.” Software releases ranging from 2012 to 2019 were used for the research and it was noted that the older versions of Bitcoin struggled to synchronize past 2015 – 2016 even when run on high end machines “with 64 GB of RAM and 8 Intel i9 processor.”

Source: Bitmex Research Report

This test is a proof of the fact that the scalability enhancements delivered over the last few years have played a major part in improving the performance of Bitcoin. The transition from Open SSL to libsecp256k1, which was a signature verification library designed specifically for Bitcoin, is considered to be the most significant improvement. This research also confirmed that without improvements in scalability, Bitcoin would be rendered useless.

The report concluded that the scalability improvements were able to maintain the sync times only up to a certain period. After a few initial releases, when Bitcoin started gaining popularity much faster than the scalability updates, the sync times got longer. A part of the report reads:

“The data also shows that technological innovation is unlikely to keep up with the growing blockchain going forward and that IBD times will increase.”

Scalability is an issue that will prove to be damaging to Bitcoin if it is not addressed before it ever goes mainstream. There have been various proposals regarding a Bitcoin Hardfork as well to address Bitcoin’s scalability issues. It is however expected that the future Bitcoin core software updates would be able to tackle the heavy inflow of transactions as such a hard fork won’t be necessary. As Bobby Lee, CEO of BTC China had said:

“Bitcoin is the real Bitcoin.”

Anna Larsen
Anna Larsen has been a Crypto enthusiast since 2016. Fascinated by the technology and its usecases she decided to pursue a career in content creation related to this space. The journey has been exciting ever since.

Nugget’s News: Crypto Market Update 1st December

Previous article

Ripple’s stake in Moneygram has its perks’

Next article

Comments

Leave a reply

You may also like

More in News