Jeff Garzik, one of bitcoin core developers and senior software engineer at Bitpay, has suggested that the limit on the block size should be raised to 2MB. Currently, the digital currency network can handle just 7 transactions each second, what significantly reduces the network scalability.
According to Garzik, the current block size limit of 1MB can cause a serious problem of undercapacity in the upcoming years. With the ongoing growth of cryptocurrency usage, the number of transactions confirmed by the blockchain is escalating at a high rate.
Once the limit of 1MB is reached, the transactions that cannot be recorded will be dropped from the network. Besides, the speed of transactions will be significantly reduced as, in order to be confirmed, they will have to wait for the next block.
Garzik’s plan, known as the 100th official Bitcoin Improvement Proposal or BIP100, proposes that the bitcoin block size limit should be ranging from above 1MB to 32MB.
The topic is being actively discussed within the bitcoin community. Developers, including such industry leaders as Mike Hearn and Gavin Andresen, believe the upgrade is necessary.
Earlier this year, Andresen offered a plan to raise the block size to 20MB. He developed a code for a bitcoin hard fork that would let any block to reach the maximum limit.
A hard fork is a term that describes changes in the protocol when the blockchain splits into a number of different chains. In this case, the users will have to choose whether to use a 20MB or a 1MB chain, what means that some transactions could end up on distinct chains.
Although hard forking seems too risky, it has been done before. In 2013, the fork occurred when a block, incompatible with earlier versions of the bitcoin software, was generated. The cryptocurrency community developers decided to change some parameters in the bitcoin blockchain. As a result, those who hadn’t upgraded the software were pushed off the chain, as the majority in the network chose the new pattern.
While one side admits that the evolution is necessary, the opposing one considers that raising the limit is dangerous. The critics argue that the increased limit will initiate a fall in transaction fees, while the high competition for transactions will force miners to reduce each other’s fees. Meantime, the huge drop in fees will make mining unprofitable, leaving fewer miners in the network. They think it will lead to mining centralization with larger miners absorbing the fees.
The proponents warn that not scaling would result in transactions that would take hours or days to be completed. Many people would prefer to pay higher fees than wait for transactions to be implemented. Eventually, the majority of users will abandon the digital currency.
The potential of the blockchain has been recognized by a wide range of developers. Not only can it serve as an underlying technology for the digital currency, but be used to transform the music industry. The technology could be used as a payment infrastructure for the fees and could store detailed information on all the contributors to a song, including musicians, recording engineers and others who usually remain unknown.
Meantime, Ryan X. Charles, Reddit cryptocurrency engineer, is now working on the development of a blockchain-based prototype of a Reddit spin-off. Following protest by the website’s users about content manipulation, Charles decided to create a system with the use of the blockchain, which is cryptographically protected against revisions. This means no one can remove the users’ comments.