How does Bitcoin spread widely?
Although technology is developing rapidly, it is not possible to say the same for Bitcoin. Bitcoin is a slow-growing system — it’s deliberate. Sir, you know Bitcoin is a digital currency. It gets serious when money is involved. Bitcoin developers also act with this awareness.
These developers have a basic principle: “haste makes waste”, so the faster you go and the more you don’t test and experiment, the more likely it is to crash. That’s why this community chooses to develop the Bitcoin system slowly, so to speak, intimidating.
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This community has a second principle: “The more functions you add to a product, the more vulnerability you invite.” When it comes to money, the problems caused by security gaps can become even more dramatic. Therefore, it is very difficult for developers to add new functions to Bitcoin other than money.
So what will happen then? Will Bitcoin continue as it is? Of course not. What will happen is basically this: Bitcoin will continue to function as a main (base) layer in the form of digital money. The new layers to be built on top of this main layer will offer those new functions that large masses need.
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Paying for your coffee with Bitcoin?
The biggest obstacle to Bitcoin’s growth and adoption by the masses is its own technical constraints. What are they? Let’s explain:
We say that you can send money between continents with Bitcoin. In doing so, your costs are quite low. Very good news, especially for those living abroad. But this is a relatively small group, and they do cross-border money transfers once a month, per year. Not enough for Bitcoin to spread widely.
What about using Bitcoin for micropayments in everyday life? That’s where we get stuck with Bitcoin’s own internal constraints. The number of transactions Bitcoin can make per second is limited to 7. For Ethereum, that number is 20 transactions. If we say that Paypal has the capacity to process 450 transactions per second and Visa 56,000 transactions per second, I think we can understand why Bitcoin cannot be used for micropayments.
The main problem brought by this transaction constraint is the processing speed. Normally, when you transfer Bitcoin, the transaction is received by the miners and processed into the current block. But what if more transactions were made than the volume of the block? Then the transaction is pushed to the next block. Since each block is collected and connected every 10 minutes, in such a case, your transaction will take 10 minutes. So how do miners decide whether your transaction will enter that block or the next block? According to the commission you give (or want to give) for the transaction you make. The higher your transaction fee, the sooner your transaction will be processed. Since micropayments are small numbers anyway, transaction fees have to be very low, so they are likely to be late.
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How do we speed up Bitcoin?
In fact, it is not necessary to use the entire Bitcoin system for a micropayment to take place. Because you know, when a transaction is made with Bitcoin, this transaction is written to thousands of machines. Why would you write the process of a coffee you buy in a cafe in thousands of machines? What if these transactions were aggregated instead of being processed one by one?
Based on this philosophy, the developers created a second layer for microtransactions on Bitcoin. They called it the Lightning Network. In our next article, let’s take a closer look at what this Lightning Network is.
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