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Scalability in Bitcoin Where are we?

June 29, 2020

Bitcoin’s development is currently heavily focused on improving its technical specifications and ability to offer mechanisms for Scale real-time without negatively affecting the protocol and network decentralization. Not an easy task that has led the community to several controversial events.

The first attempts to solve Bitcoin’s scalability problem can be seen in the BIP-100 and BIP-101. Both proposals were presented in 2015 by developers Jeff Garzik and Gavin Andresen.

Garzik’s BIP-100 suggested that the size of the blocks be adjustable by minerswho could mutually decide which block size would be appropriate to maintain the good condition of the Bitcoin network. A proposal that opens the door to continuous and controlled scalability over time. On the other hand, el Andresen’s BIP-101 proposed a direct increase in block size from 1MB to 8MB.

Scalability in Bitcoin Where are we?Scalability in Bitcoin Where are we?

Both proposals pose the same problem. They depend on a hard fork that has made the network incompatible with the nodes on which an earlier version of the protocol is running. Many in the community didn’t like the idea, nor the way in which these changes should be made. Actually, The BIP-101 controversy led Andresen to leave his position as Bitcoin Development Leader.

But the situation didn’t end. In fact, other proposals were made there, which we will discuss in more detail below.

Bitcoin Unlimited and Bitcoin XT

Bitcoin Unlimited (BU) is a complete node implementation for the Bitcoin networks you are looking for Allow node owners to specify the size limit for network blocks. To this end, they used the same mechanism that was proposed in Jeff Garzik’s BIP-100. In this way, they could find the block size limit by consensus and thereby lead to a noticeable and continuous improvement in the scalability of Bitcoin.

For his part, Bitcoin XT was a proposal to develop a Bitcoin node that tried to apply the limit set by Gavin Andresen for its BIP-101.

However, both suggestions weren’t well received by Bitcoin developers, but one group made two of them. Bitcoin Cash, a fork of Bitcoin, comes from this community and is compatible with the protocols defined in Bitcoin Unlimited and Bitcoin XT.

SegWit

SegWit is the contraction of segregated witness or segregated witness. It is an improvement of Bitcoin, which will be presented jointly by Blockstream and the development team of the Bitcoin core customer. This soft fork was proposed in one of the BIPs, specifically under BIP-141, called “Segregated Witness (Consensus Layer)”.

SegWit’s goal was to improve the scalability of Bitcoin and solve a serious problem with the malleability of transactions in Bitcoin. Be a soft fork Such changes would not break with the current network protocol and could be applied with virtually no risk.

However, SegWit has not fully met its promise to improve Bitcoin’s scalability, and this has helped the community to attack the proposal.

SegWit2x

SegWit2x was another scalability proposal in Bitcoin that was born of the well-known New York agreement. I had this as my goal Apply the SegWit proposal and at the same time increase the block size in Bitcoin to 2 MB. The presentation of SegWit2x was very controversial.

On the one hand, it was claimed that it was an attempt by Bitcoin companies and large entrepreneurs to manipulate the development of Bitcoin. But on the other side More than 80% of Bitcoin miners agreed to use such a hard fork. Nevertheless, the developers of Bitcoin Core remained unmoved and didn’t make the necessary changes to run this hard fork.

The project would be out of favor if SegWit2x supporters included changes to their node’s code that would adversely affect the operation of the Bitcoin network. Something I wore to end the community by turning its back on it.

Lightning network

Lightning Network, or LN, as it is called, was born from a proposal by Joseph Poon and Thaddeus Dryja. The goal is to clearly solve Bitcoin’s scalability problem. However, Lightning is viewed by its developers as an alpha network that is under development. And although it can still be used today, it is recommended that you take part in it carefully. Especially when dealing with large sums of money.

Another scalability proposal like Lightning Network is Lumino Network from IOV Labs (formerly RSK Labs). Lumino is a third-layer solution that is compatible with Lightning Network focused on the scalability of payments within the integrated RSK ecosystem. The RSK ecosystem offers the ability to provide smart contracts and other advanced features based on Bitcoin technology.

Related: iquest; Qu é is Lightning Network and how does it work?