The blockchain’s scalability problem has been a long-debated, long-standing issue in the cryptocurrency world. There have been lengthy and complex arguments over what should be done about this problem, but few solutions have been adapted.

Scalability and Limitations

Cryptocurrencies like bitcoin and Ethereum use blocks to process information and transactions. In their early stages, the sizes of these blocks were quite limited. For bitcoin, it was 1 megabyte.

The mechanism was intended for security. One can say that it did a good job in that area. However, with the benefit comes the downside: the limited size of the block doesn’t help with the amount of data stored with every transaction. At 1mb per block, bitcoin can only handle three or four transactions per second.

If the cryptocurrencies really aim to go mainstream, the blockchain’s scalability problem could be the biggest barrier it would have to break. It would need to handle hundreds or thousands or even millions or transactions every second to keep the economy moving without dramatic delays for businesses and consumers.

For Ethereum, the limit is at 15 transactions per second. According to Vitalik Buterin, co-founder of Ethereum, the industry infrastructure will not be able to catch up if the scalability question isn’t answered.

Other Problems Relating to Blockchain’s Scalability

Coming up with a solution isn’t easy and takes a long time and lots of effort. There are also other problems spawned by the bigger problems.

For one, active discussions about changing the block size of a currency have typically ended up in disagreement. In part, coin miners, developers, businesses, and other stakeholders cannot seem to agree with one solid solution.

Here’s an example: some were content on doubling the size of a bitcoin block to 2mb. However, others wanted to go as far as 32mb, and no proposal has been universally adopted.

Bitcoin Cash (BCH), which is result of a hard fork in August 2017, recently made an upgrade and quadrupled its block size to 32mb. Proponents believe that increasing the block size this large means the blockchain would be able to cater future demands while also opening doors for potentially newer features.

However, critics argue that this just makes full operating nodes more expensive and there will be less decentralization.

If Unsolved…

There are quite a number of downsides if we are not able to solve the scalability problem.

If blockchain’s scalability problem persists, it will take more and more time for transactions to finish. This is a huge hindrance to blockchain’s success, especially on a backdrop of ultra-fast fiat currency payments.

And because of this possibility, even the most zealous supporter of the cryptocurrency industry will likely abandon the field. With fewer people using cryptocurrencies, bitcoin, Ethereum, and other digital currencies will see their values plunging deep.

Centralization would also have to stay, even though its loopholes and imperfections are the very reasons why the blockchain and digital currencies have come into existence. It’s quite unimaginable how many more potential benefits we will have to let go if the scalability question is never answered.