Monday, March 14, 2016

Satoshi Roundtable: Is Bitcoin Dead due to Scalability Issues?

Scalability was the most prominent issue discussed at the February 26-28, 2016 Satoshi Roundtable (the Bitcoin industry's annual technical meeting).

This is expected as scalability is an ongoing issue to be resolved for any cryptocurrency to achieve mainstream adoption.

Bitcoin as the most mature and liquid cryptocurrency is being pushed towards current limits which prompts urgency to attend to scalability and other issues.

Scalability is a hard problem, and needs to be resolved at some point if cryptocurrencies are to succeed, here with Bitcoin, or in future iterations of other cryptocurrencies.

There are different technical proposals for Bitcoin and it is not clear which might be best, or even if these are the right type of solutions.

However, it is also clear that we might not know without trying, so one or more solutions will need to be implemented.

One scalability design question for example is whether to knit together activity from large bodies of side chains, or have one monolithic processing architecture.

There could already be a split to industry-specific chains that implement different forms of scalability functionality.

A need for more robust prototyping environments and multiple core developer teams has been suggested, which could be good as cryptocurrencies are fundamentally new territory.

Whatever solutions arrive for Bitcoin may not be the final solutions for all cryptocurrencies and the bigger potential economic future of ubiquitous digital payments.

There are always a host of technical issues in the rapidly-evolving cryptocurrency space, and another concern is the reward structure for Bitcoin miners, which is due to change in July.

Compared to scalability, this is not as big of a concern impacting Bitcoin's overall viability as the mining market tends to resiliently resettle around different set points of miner demand, supply, and rewards.

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