The most important cryptocurrency, Bitcoin (BTC), has become more and more popular year after year. And all started since it was created in 2009. On the verge of its first decade, the culture of adoption and implementation is also booming, along with that of the other alternative cryptocurrencies. However, more transactions mean larger blocks that form the blockchain network. At present, the Bitcoin network is regularly producing blocks above the 1 MB block size limit. This limit was set before Segregated Witness (SegWit) existed.
Bitcoin's 1MB Block Size Limit Begins To Disappear
BTC is now worth approximately $6.400 dollars according to CoinMarketCap. And the Bitcoin network produces blocks approximately every 10 minutes. Blocks that are now exceeding the 1 MB limit. Limit that existed before the introduction of Segregated Witness. SegWit became operational in August 2017.
After the implementation of SegWit in August 2017, the old block size limit of 1 MB is slowly beginning to fade. But in a much slower way than many expected.
The fundamental problem of increasing the 1 MB block size limit became relevant and of priority when BTC transaction fees started to reach record highs at the big bullish party in December 2017, just 4 months after the integration of the SegWit. However, the implementation took place through the soft-fork mode. So it was just an optional upgrade. This is the main reason why exchanges, companies and users have taken almost a year to see the benefits across the network; benefits that would correspond to lower fees and larger blocks in the blockchain.
There are certain problems coming together to get us out of this bad patch of market turmoil. For example, if we take into account the downward trend along with the second longest correction in the history of the BTC this year, and adding the SegWit transactions which also now account for almost half of all transactions; all this together intrinsically implies that the cost of sending BTCs has fallen to record lows.
So right now it's not uncommon to see rates of 1 satoshi per byte. We're talking about the lowest possible rate on the Bitcoin network. That is, this means that large amounts like $10,000 in BTC can now be shipped for only 1 cent.
Bitcoin Network Is Scaling Up
But these problems do not mean that people stopped using BTC. Although there has been evidence of a greater boom in trading in alternative cryptocurrencies, the latest research shows that the average block size is now 1.06 MB, according to Blockchain.com.
In parallel, the concept of “block size” is being replaced by “block weight“. And the Bitcoin network is now supporting a weight of up to 4 MB.
So the implementation of SegWit also paved the way for scaling solutions outside the chain. This was previously not possible without an idea such as the Lightning Network (LN).
LN is a second layer that is built on Bitcoin. That would be for now the only alternative to sight could give you the ability to significantly outperform Visa and PayPal. Which would allow it to support millions of transactions per second. And at the same time it would remain a decentralized platform, but according to some members of the community they believe it would become a “trustless” platform.
“While some blockchain communities have increased on-chain transaction capacity (e.g. blocksize increases), this approach generally degrades the decentralized state of the network and cannot reach the millions of transactions per second the system would generate at world-scale,”
Director of Program Management at Microsoft’s Identity Division Alex Simons said. Other proponents of layered scaling solutions like Lightning include the author of Mastering Bitcoin, Andreas Antonopoulos.
“It’s not possible to do orders of magnitude block size increases without fundamentally destroying the decentralization principles of Bitcoin – at least not yet,” explains Antonopoulos.
“…Lightning Network really does bring enough scaling. It allows us to change the dimensions of Bitcoin; it allows us to reduce the granularity of payments, not just down to millibits but down to satoshis and even sub-satoshi amounts… and do that all on the scale of millisecond round trips,” he concluded.