Blockchain technology, the backbone of Bitcoin, is facing scalability issues. Its current design restricts it to handling only seven transactions per second, a stark contrast to Visa’s 2,000 transactions per second. This limitation is due to the blockchain’s decentralised nature, which requires each node in the network to process every transaction, ensuring security and preventing fraud. However, this makes it difficult to scale up without compromising security.
Several solutions are being proposed to overcome this issue. One approach is to increase the block size, allowing more transactions to be processed at once. Another option is to create ‘off-chain’ transactions that occur outside the main blockchain, reducing the load on the network. Yet, these solutions come with their own challenges, such as the potential for centralisation and increased risk of fraud.
Despite these challenges, the potential benefits of blockchain technology are significant. It has the ability to provide a secure, transparent, and tamper-proof method of recording transactions. This could revolutionise industries such as finance, supply chain management, and even voting systems. Therefore, the quest for a scalable blockchain solution continues, with many in the tech industry optimistic about its future potential.
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