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Blockchain Scalability: When, Where, How?

In a talk at CoinJar last fall, well-known bitcoin expert Andreas Antonopoulos made the following comment:

“I have no worries that bitcoin can scale, and the simple reason for that is that I know that IPv4 can’t, and yet I use it every day.” The issue of bitcoin scalability and the phrase “blockchain scalability” are often seen in technical discussions of the bitcoin protocol. Will the requirements of recording every bitcoin transaction in the blockchain compromise its security (because fewer users will keep a copy of the whole blockchain) or its ability to handle a great number of transactions (because new blocks on which transactions can be recorded are only produced at limited intervals)? In this article, we’ll explore several meanings of “blockchain scalability” and some high-level technical solutions to the issue.

The three main stumbling blocks to blockchain scalability are:


Mastering Bitcoin By Andreas Antonopoulos Shop now The tendency toward centralization with a growing blockchain: the larger the blockchain grows, the larger the requirements become for storage, bandwidth, and computational power that must be spent by “full nodes” in the network, leading to a risk of much higher centralization if the blockchain becomes large enough that only a few nodes are able to process a block. The bitcoin-specific issue that the blockchain has a built-in hard limit of 1 megabyte per block (about 10 minutes), and removing this limit requires a “hard fork” (ie. backward-incompatible change) to the bitcoin protocol. The high processing fees currently paid for bitcoin transactions, and the potential for those fees to increase as the network grows. We won’t discuss this too much, but see here for more detail. We’ll consider these first two issues in detail.

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