Let’s take a quick look at: Bitcoin Scalability
Bitcoin scalability has been a hot topic for some time. Transactions-per-second (“TPS”) is the one primary metric used for comparing the performance of the bitcoin blockchain to traditional payment platforms.
Bitcoin is inefficient…
One argument points to Bitcoin’s low base-layer transaction volume throughput which is significantly below traditional payment systems such as Visa and Paypal.
But value per transaction is high…
However, one critical point to highlight is that the value per transaction on Bitcoin is actually quite high and in fact two times the size of Paypal, as measured by annual transaction value.
Usage has increased 10x for large transactions…
Since 2016, Bitcoin’s total transaction value has increased 10x which implies usage as a settlement network for large transactions is growing in significance.
And don’t forget to keep an eye on “2nd layer” scalability solutions
In the debate of scalability, remember to keep an eye on the potential impact of solutions that will be layered on top of the base protocol. Early developments of 2nd layer solutions can be seen for example with the Lightning Network, a bidirectional payment channel network that facilitates high-volume low-value spending.
Stay tuned to see whether Bitcoin can compete effectively with traditional payment in terms of scalability and efficiency.
Read more from Hashreader:
