A new study by the Initiative for CryptoCurrencies and Contracts (IC3) at the Jacobs Technion-Cornell Institute authored by Christian Decker, Ittay Eyal, Andrew Miller and Emin Gün Sirer, among others, found that bitcoin’s blocksize could currently scale up to 4MB without affecting decentralization. According to…
A new study by the Initiative for CryptoCurrencies and Contracts (IC3) at the Jacobs Technion-Cornell Institute authored by Christian Decker, Ittay Eyal, Andrew Miller and Emin Gün Sirer, among others, found that bitcoin’s blocksize could currently scale up to 4MB without affecting decentralization.
According to the recently released position paper, On Scaling Decentralized Blockchains, 4,000 Bitcoin nodes were tested and per-node bandwidth performance was measured. The study found that 90%, of the then, 4565 bitcoin nodes (currently standing at more than 7,000), can continue to operate at 4MB blocks, translating to approximately 27 transactions per second, far more than the current practical limit of approximately 2.5 transactions per second.
The study [PDF] reveals some striking results in showing that 50% of bitcoin’s nodes, that is approximately 2,500 nodes, would not be affected by a blocksize of just under 40MB, translating to 250 transactions per second or approximately 10 million transactions a day. Furthermore, 10% of the bitcoin network, that is almost 500 bitcoin nodes, can today operate under a blocksize of 200MB, at which point the network reaches comparable levels to the VISA payment network.
Bitcoin’s scalability has been a hot topic over the past year leading to a schism within bitcoin’s community. The debate began even before the genesis block was mined, with the first reply to Satoshi’s announcement of bitcoin on the cypherpunk mailing list opining that the system could not scale. Satoshi replied to that criticism by stating:
A typical transaction would be about 400 bytes… Visa processed… an average of 100 million transactions per day. That many transactions would take 100GB of bandwidth, or the size of 12 DVD or 2 HD quality movies, or about $18 worth of bandwidth at current prices.
If the network were to get that big, it would take several years, and by then, sending 2 HD movies over the Internet would probably not seem like a big deal.
However, consensus was not reached, with James A. Donald, a seemingly pseudonymous figure, roughly describing, in reply, the much-expected lightning network:
Let us call a bitcoin bank a bink. The bitcoins stand in the same relation to account money as gold stood in the days of the gold standard. The binks, not trusting each other to be liquid when liquidity is most needed, settle out any net discrepancies with each other by moving bitcoins around once every hundred thousand seconds or so, so bitcoins do not change owners that often, Most transactions cancel out at the account level.
The binks demand bitcoins of each other only because they don’t want to hold account money for too long. So a relatively small amount of bitcoins infrequently transacted can support a somewhat larger amount of account money frequently transacted.
The much awaited Lightning Network, although not yet released, has been subject to much criticism with the Cornell study, in briefly mentioning the Lightning Network, concluding that the Lightning Network:
[M]ay embody a similar tradeoff between performance and centralization in the payment network; a centralized hub-and-spoke topology that simplifies routing embodies inherent problems with centralization, such as loss of privacy. The design of protocols for efficient, scalable, privacy-preserving payment networks is an ongoing area of research: it is far from a given that they can outperform Bitcoin’s Network and Consensus layers overall.
This ancient (in internet terms) debate therefore continues, but the recent scientific findings highlighted above may aid the two camps in bridging their divide and find common ground.
Featured image from Shutterstock.
Last modified: May 21, 2020 10:31 AM UTC