The Solution to the Bitcoin Scalability Problem: The Lightning Network

The bitcoin scalability problem exists because of the practical limits on the maximum number of transactions the bitcoin network can process. It is a consequence of the fact that blocks in the blockchain are limited to one megabyte in size.

The one-megabyte limit has created a bottleneck in bitcoin, resulting in increasing transaction fees and delayed processing of transactions that cannot be fit into a block. Various solutions have been proposed to solve the scalability problem, and The Lightning Network is one of them.

Lightning is a decentralized network using smart contract functionality in the blockchain to enable instant payments across a network of participants. It claims to be the transactions for the future. It features instant payments, scalability, low cost and cross blockchains.

Joseph Poon is the co-author of the Lighting Network. In addition to this, he is also the co-author of Plasma. According to its abstract, Plasma is a proposed framework for incentivized and enforced execution of smart contracts which is scalable to a significant amount of state updates per second (potentially billions) enabling the blockchain to be able to represent a significant amount of decentralized financial applications worldwide. Here is a video in which Poon talks about Plasma in details:

Recently, Joseph Poon has also taken on an Ethereum startup exchange project in Thailand named Omise. “Once it’s finished, users will be able to trade fiat currencies for cryptocurrencies, or exchange between almost any cryptocurrencies (say bitcoin for ether) without a third party like Coinbase or Kraken”.

Joseph’s current areas of research involves blockchains scalability, inter-blockchain interaction, token mechanisms, and cryptoeconomic incentives. He will be attending our Blockchain Connect Conference on Jan 26. Join us to learn more about blockchains scalability challenges and solutions here.