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Cryptocurrencies: Size and Transaction Speed Scalability Issues Threaten Viability

By Dick Weisinger

Bitcoin and Ethereum are two of the larged blockchain implementations.  Both have had problems addressing scalability, and these problems have threatened the long-term viability of the technologies.  Both of these cryptocurrencies have had issues with transaction speeds and overall data size.

A test run in early 2018 found that while the 24,000 transactions can be run by Visa every second, Ethereum can support 20, and Bitcoin can support 7.  In order for blockchain to be able to support applications like financial transactions, contracts and Internet of Things (IoT), hundreds of thousands of transactions per second are necessary.

The size of Etherium data is also a problem.  “As Ethereum’s blockchain size increases, it becomes more difficult for miners to keep up with it. The lack of any cap on the block size means that the amount of data full nodes needs to verify keeps on increasing. Ethereum is a smart contract platform and is host to several decentralized apps, all of which tend to keep adding more transactions. As its blockchain size increases, full nodes are increasingly stressed for bandwidth and storage. In the event when a specific piece of hardware is no longer capable of handling transactions at a high enough speed, the node will fail to sync,” Rahul Nambiampurath wrote for btcmanager.com.

Vitalik Buterin, Ethereum co-founder said when asked how many years it would take for Etherium to overcome scalability issues that it will take “two to five, with early prototypes in one year. The various scaling solutions, including sharding, plasma and various state channel systems such as Raiden and Perun, are already quite well thought out, and development has already started. Raiden is the earliest, and its developer preview release is out already.”

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