How Does Bitcoin Solve the Scaling Problem?

During the early days of bitcoin, very few users participated in its network, and the number of transactions processed was not high. However, scaling issues gradually emerged as the network expanded to attract a larger number of transactions, miners, and users.

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Currently, the BTC blockchain may be able to process around 7 to 10 transactions each per second.

However, those who were early adopters of BTC were the first to recognized a probable scaling case and several suggested how it could be addressed. So, let’s explore how bitcoin might be able to unriddle the scalability issue.

Scaling Bitcoin (BTC)

BTC is capable of acting as a digital coin and distributed network. Talking of tokens, usually, it is used for exchange among investors, while the network that keeps processing it can track the history of all the transactions done through the blockchain network.

However, you can also transfer your BTC outside the blockchain using other protocols and networks if you wish.

This provides an opportunity to scale and host the vast payment infrastructure needed to bring BTC into the mainstream as a major global means of payment.

Furthermore, several proposals can be looked at to completely solve BTC’s scalability problem, although currently, two approaches have emerged as the most viable and efficient.

One of which is upgrading the blockchain to handle the rising volume of transactions. In addition, innovative additional networks, also known as layers, can be created to transfer BTC directly without the blockchain.

Bitcoin Layers

Here if we talk about layer, it has emerged as an alternative network for BTC’s blockchain.

Through which users are allowed to transfer BTC. Furthermore, they allow BTC blockchain transactions to be organized in batches or represent large payment volumes.

Albeit the layers are generally connected with a blockchain, they don’t air each transaction to the network.

This way, the fee is not levied and the settlement of the payment is facilitated with greater speed.

The Lightning Network (LN)

Here if we talk about The Lightning Network (LN), it is considered to be one of the most prominent layers on the blockchain of BTC.

It plays an important role in enabling small daily transactions and micropayments. Currently, it is not economical on the BTC network.

It may also be able to facilitate instant and no-cost or almost free BTC transfers between parties. Lightning channels are unwound and discontinued by users on regular BTC transactions and via the blockchain.

On the other hand, once a track is opened by a party, it can execute an unlimited number of Lightning transactions.

Liquid Network

Here if we talk about Liquid Networks, then this blockchain is considered similar to BTC, but it is not completely decentralized, mainly because it is controlled by a group of institutions.

However, Liquid Networks can play an important role in guaranteeing low fees and quick payments at the cost of decentralization.

While there are still many options that exist to solve the BTC scaling problem. Although layers are undoubtedly one of the most efficient and flexible solutions.

Layers can play an important role in making BTC cheaper, easier to spend, and faster. Innovative layers built right into the bitcoin protocol and on top of BTC’s blockchain enable the network to handle over a thousand micropayments and all international transactions per day.

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