Wikipedia

Bitcoin scalability

(Redirected from SegWit2x)

Bitcoin scalability refers to the capability of the Bitcoin network to handle large amounts of transaction data on its platform.[1] Records (known as blocks) in the Bitcoin blockchain are limited in size and frequency to prioritize security and decentralization by keeping the cost of running a Bitcoin node affordable.[2][3] With an average block creation time of 10 minutes and a block size limit of around 1 megabyte, the base layer processes an estimated 3.3 to 7 transactions per second.[4]: ch. 2 [2]

The Lightning Network is a secondary network designed to address bitcoin scalability

Scalability is often contrasted with security and decentralization.[5]

The term "Layer 2" is used for systems, such as the Lightning Network, which process multiple transactions more quickly using a separate network and then updating the bitcoin blockchain in batches.[6]

Background

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The block size limit, and the proof-of-work difficulty adjustment settings of bitcoin's consensus protocol, creates a bottleneck in bitcoin's transaction processing capacity. This can result in increased transaction fees and delayed processing of transactions that cannot be fit into a block.[7] Proposals for how to scale bitcoin have lead to contentious debate. Business Insider in 2017 characterized this debate as an "ideological battle over bitcoin's future."[8]

Efficiency improvements

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Technical optimizations may decrease the amount of computing resources required to receive, process and record bitcoin transactions, allowing increased throughput without placing extra demand on the bitcoin network. These modifications can be to either the network, in which case a fork is required, or to individual node software (such as Bitcoin Core).

Additional systems

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A Lightning Network overview

The Lightning Network (LN) is a protocol that aims to improve bitcoin's scalability and speed.[12]

In January 2018 Blockstream launched a payment processing system for web retailers called "Lightning Charge", noted that lightning was live on mainnet with 200 nodes operating as of 27 January 2018 and advised it should still be considered "in testing". The Liquid Network is a sidechain that Blockstream developed which is built on top of Bitcoin.[13] It processes blocks every minute instead of every 10 minutes.[14][15]

As part of a government program to expand the use of Bitcoin in El Salvador, the El Salvador introduced a wallet based on the Lightning Network protocol while allowing for other Bitcoin Lightning wallets. The government distributed US$30 in bitcoin to people who sign up to use an electronic wallet called "Chivo".[16] Chivo was run by a private enterprise, but information regarding the platform and its policies were classified by the government.[17] [18] In December, 2024, El Salvador, in an agreement for a $1.4 billion loan from the IMF, the government began to wind-down its involvement in the Chivo wallet.[19][20]

Block size increases

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Bitcoin's transaction throughput is limited by two parameters:

  • the block time determines how often a new block is added to the chain,
  • the block size determines the amount of data that can be added with every block.

Bitcoin has a block time of 10 minutes and a block size of 1 MB. Various increases to this limit, and proposals to remove it completely, have been proposed over bitcoin's history. Implementing any of these proposals involves a fork. The common argument against such increases is the additional difficulty and expense of running a full node (i.e. one carrying the entire distributed ledger). This is due to the increased overall size of the ledger[5], which puts puts pressure on the node in terms of both RAM and storage space.[21]

Litecoin produces blocks four times faster than Bitcoin which leads to a 4x improvement in throughput. Dogecoin has even more throughput with a block time of 1 minute. Bitcoin Cash has a block size of 32 MB and hence 32x more throughput than Bitcoin. Bitcoin SV removed the block size limit altogether.

Proposed

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  • Bitcoin XT was proposed in 2015 to increase the transaction processing capacity of bitcoin by increasing the block size limit.[22]
  • Bitcoin Classic was proposed in 2016 to increase the transaction processing capacity of bitcoin by increasing the block size limit.
  • "The Hong Kong Agreement" was a 2016 agreement of some miners and developers that contained a timetable that would see both the activation of the Segregated Witness (SegWit) proposal established in December 2015 by Bitcoin Core developers, and the development of a block size limit increased to 2 MB. However, both timelines were missed.
  • SegWit2x was a proposed hard fork of the cryptocurrency bitcoin. The implementation of Segregated Witness in August 2017 was only the first half of the so-called "New York Agreement" by which those who wanted to increase effective block size by SegWit compromised with those who wanted to increase block size by a hard fork to a larger block size.[23] The second half of SegWit2x involved a hard fork in November 2017 to increase the blocksize to 2 megabytes. On 8 November 2017 the developers of SegWit2x announced that the hard fork planned for around 16 November 2017 was canceled for the time being due to a lack of consensus.
  • Bitcoin Unlimited advocated for miner flexibility to increase the block size limit. This proposal is different from Bitcoin Core in that the block size parameter is not hard-coded, and rather the nodes and miners flag support for the size that they want, using an idea they refer to as 'emergent consensus'.

See also

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References

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  1. ↑ [The Limits to Blockchain? Scaling vs. Decentralization.] Social Science Research Network. Cybersecurity, Privacy & Networks eJournal. Accessed 21 April 2019.
  2. 1 2 Croman, Kyle; Eyal, Ittay (2016). "On Scaling Decentralized Blockchains" (PDF). Financial Cryptography and Data Security. Lecture Notes in Computer Science. Vol. 9604. pp. 106–125. doi:10.1007/978-3-662-53357-4_8. ISBN 978-3-662-53356-7. Retrieved 10 December 2017. The maximum throughput is the maximum rate at which the blockchain can confirm transactions. Today, bitcoin's maximum throughput is 3.3–7 transactions/sec [1]. This number is constrained by the maximum block size and the inter-block time.
  3. ↑ Bier, Jonathan (11 March 2021). The Blocksize War. Independently Published. ISBN 979-8-7107-4951-7.
  4. ↑ Antonopoulos, Andreas M. (April 2014). Mastering Bitcoin. Unlocking Digital Crypto-Currencies. O'Reilly Media. ISBN 978-1-4493-7404-4.
  5. 1 2 Heo, Jun Wook; Ramachandran, Gowri Sankar; Dorri, Ali; Jurdak, Raja (31 July 2024). "Blockchain Data Storage Optimisations: A Comprehensive Survey". ACM Computing Surveys. 56 (7): 1–27. doi:10.1145/3645104. ISSN 0360-0300.
  6. ↑ Hijfte, Stijn Van (6 July 2020). Blockchain Platforms: A Look at the Underbelly of Distributed Platforms. Morgan & Claypool Publishers. ISBN 978-1-68173-892-5.
  7. ↑ Pearson, Jordan (14 October 2016). "'Bitcoin Unlimited' Hopes to Save Bitcoin from Itself". Motherboard. Vice Media LLC. Retrieved 17 January 2017.
  8. ↑ Williams-Grut, Oscar; Price, Rob (26 March 2017). "A Bitcoin civil war is threatening to tear the digital currency in 2 — here's what you need to know". Business Insider. Retrieved 2 July 2017.
  9. ↑ "kanzure/diyhpluswiki". GitHub. 9 October 2021.
  10. ↑ "[WIP] Aggregate signature module implementation by apoelstra · Pull Request #461 · bitcoin-core/Secp256k1". GitHub.
  11. ↑ Mihir Bellare and Gregory Neven (2006). "Multi-Signatures in the Plain Public-Key Model and a General Forking Lemma" (PDF). Proceedings of the 13th ACM Conference on Computer and Communications Security (CCS 2006). ACM. pp. 390–399. Retrieved 14 October 2025. A multi-signature scheme enables a group of signers to produce a compact, joint signature on a common document, and has many potential uses. ... Our multi-signature schemes achieve signature aggregation with constant-size signatures (O(1)), and the security is provably reduced to the standard Discrete Logarithm problem (i.e., Schnorr in the single-key case).
  12. ↑ Antonopoulos, Andreas (2017). Mastering Bitcoin (2nd ed.). O'Reilly. pp. 297–304. ISBN 978-1491954386.
  13. ↑ "New Crypto Consortium Seeks to Alleviate Liquidity Problems". Bloomberg.com. Archived from the original on 27 December 2018. Retrieved 29 April 2026.
  14. ↑ Hijfte, Stijn Van (6 July 2020). Blockchain Platforms: A Look at the Underbelly of Distributed Platforms. Morgan & Claypool Publishers. ISBN 978-1-68173-892-5.
  15. ↑ "New Crypto Consortium Seeks to Alleviate Liquidity Problems". Bloomberg.com. Archived from the original on 27 December 2018. Retrieved 29 April 2026.
  16. ↑ Pérez, Santiago; Ostroff, Caitlin (26 August 2021). "El Salvador Gets Ready for a Risky Bitcoin Experiment". The Wall Street Journal. Retrieved 26 August 2021.
  17. ↑ Kurmanaev, Anatoly; Avelar, Bryan; Livni, Ephrat (7 October 2021). "Bitcoin Preaches Financial Liberty. A Strongman Is Testing That Promise". The New York Times. ISSN 0362-4331. Retrieved 27 January 2022.
  18. ↑ "Countries That Defied Odds in Terms of Crypto Acceptance". Urban Kenyans. 9 November 2022. Archived from the original on 4 October 2023. Retrieved 12 November 2022.
  19. ↑ Pérez, Santiago (18 December 2024). "El Salvador Made Bitcoin an Official Currency. Now It's Backtracking for IMF Loan". WSJ. Retrieved 19 December 2024.
  20. ↑ Renteria, Nelson (19 December 2024). "El Salvador says it will keep buying bitcoin despite IMF warning". Reuters.
  21. ↑ Chen, Huan; Wang, Yijie (2020-09). "MiniChain: A lightweight protocol to combat the UTXO growth in public blockchain". Journal of Parallel and Distributed Computing. 143: 67–76. doi:10.1016/j.jpdc.2020.05.001. ISSN 0743-7315. Archived from the original on 2023-08-10. {{cite journal}}: Check date values in: |date= (help)
  22. ↑ Alex Hern (17 August 2015). "Bitcoin's forked: chief scientist launches alternative proposal for the currency". the Guardian. Retrieved 20 August 2015.
  23. ↑ Vigna, Paul (8 November 2017). "Bitcoin Dodges Split That Threatened Its Surging Price". The Wall Street Journal. Archived from the original on 8 November 2017. Retrieved 8 November 2017.
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