A new analysis of the Bitcoin software concludes that Bitcoin needs a complete redesign to support the number of transactions needed to become widely used.
Ballots in the Bitcoin community are contemplating proposals to adjust the software. The main reason of the adjustments would be to increase the amount of transactions, which are at a paltry seven per second at this moment. Compare this to Visa for example; Visa's system processes an average 2.000 transactions per second and can handle up to 56.000 transactions per second. Quite a difference with Bitcoin's seven.
Ari Juels, a cryptographer and coauthor of the recent study, said: “The current debate is missing the forest for the trees. We have to think in fundamental redesign if we're going to see robust scaling in Bitcoin.” Ari Juels worked along with 11 other researchers on the new study.
Bitcoin's capacity limit is due to the way transactions are recorded in blocks. A new block is added to the digital ledger every 10 minutes, but they have a maximum size of 1MB, which leads to a maximum of seven transactions per second. Gavin Andresen, who worked on Bitcoin's software for almost four years, stated that the limit is already a problem for Bitcoin, with delays as a result.
Adam Back, the inventor of hashcash, the proof-of-work system used by Bitcoin, says new technology is needed to scale up Bitcoin. “There's strong interest from academia, lots of new technology coming in the next 18 months, and a lot of funding coming to the industry.”