The Bitcoin Lightning Network, Part One

Most people who follow closely the trends of Bitcoin world are aware of the limitation of the current block size and know a lot about the discussion held on this topic. Basically , there is a limit to 1mb per block today and it is proposed to extend this by increasing the block size to 20Mb. Gavin Andresen currently has a set of publications where he tells why he thinks it is appropriate to raise this block size to 20MB.

Block on 1mb allows up to 7 transactions per second with Bitcoin. This is quite small in the global context and Bitcoin becomes so widespread that this limit will soon become a problem if nothing is done. Increasing the block size to be 20MB will naturally help, but it will only postpone the problem, as even this step will not provide sufficient number of transactions per second on Bitcoin to compete globally. In contrast, VISA's average number of transactions per second is 2,000 with one upper ceiling of approximately 47000 transactions per second. If Bitcoin got similar capacity, it would need blocks of around 8GB in size. This is not feasible with current technology (hard drive space and bandwidth), if anyone wants to keep Bitcoin decentralized.

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