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Feb 09

Blockchain Scalability

By Raymond Prince

One of the hurdles facing the Bitcoin community is the scalability of the blockchain. Currently, in order to run a bitcoin node, a user needs to store the entire blockchain on their system. This blockchain holds every single transaction that has occured on the network since its inception, and is at the time of writing, 25 gigs. As this blockchain grows bigger it starts to create a push towards centralization as more and more people opt not keep a copy of the entire transaction ledger, and only nodes with sufficient space and computing power, start to control the network.

At the moment the bitcoin protocol has a built-in block limit of 1 megabyte, which adds additional scalability concerns. This limits the number of transactions that can occur in the 10 minute intervals, and limits the bitcoin protocol's ability to comparatively compete with operations such as Visa which can easily have over 100 000 transaction per second during busy periods. This 1 megabyte limit has additional drawbacks. As the network becomes more saturated higher fees will need to be paid in order to ensure your transaction takes a reasonable amount of time to confirm.