Topic: What are the bottlenecks of Bitcoin? (Read 1686 times)

1. block size.
2. proof of work
3. smart contract

IMO, transaction speed is not the biggest issue. Compared to gold, it's much better  .
Currently, btc should not be used for micropayment.

Even if you say so that people were going to jump onto Bitcoin Cash because of the 1MB block size but still most of them aren't going to invest big on it. They will still choose Bitcoin in the end, no matter how slow the transaction is people are patiently waiting for the transactions to be done because this is the only thing they can do. They could talk all negative about Bitcoin whether it's a fact or not people are still into it because of all the trust that the community put onto Bitcoin, it will rise and gonna leave those who did not trust Bitcoin.

Lists of bitcoin bottlenecks:

A.   Heavy transaction traffick
B.   Government Regulations
C.   Decentralization
D.   Increasing ledge size

Does anyone have an idea about how the Bitcoin infrastructure should look if everybody (well, let's say Europe and the US) used it? If it became more widespread than the dollar and the euro?

The smallest bottleneck is a size of blockchain.
It is more than 140 gb now, and it is not gonna to be smaller, so we need to be prepared to that

Miner (or pool) with 51+ percent of whole mining capacity can potentially define transactions that are confirmed in blockchain and thus halt transactions of some users. This already happened few months ago when btcguild (that has 30% of world hashrate computation capacity) mined 6 blocks in a raw: https://bitcointalksearch.org/topic/btcguild-just-mined-6-contiguous-blocks-why-do-you-join-them-325615

Not extremely dangerous yet, but still there is a risk.

You can find more info about 51% attach here: https://www.investopedia.com/terms/1/51-attack.asp

there are couple of bottleneck right now, but this does not mean, that they wont be solved., as time goes by.
1) tx confirmation speed.,
i.e it takes from few minutes to couple of days, depending on your fees to confirm your tx and this is not good in real life scenario where you wan to buy something , and need the confirmation as soon as possible.,
btc needs to process as much tx as comes in and it should be quick.

2) inceasing size of blockchain, what happens when btc gets more exposure, like paypal, and tx no. increases., right now, blockchain is 120gb + but if block size keeps gets inceasring, then it will be difficult for average joe to store all the blockchain files . as the size will be in terabytes.

3) bad name
as btc is being used by silk road users because of its nature., it got bad name., more and more big mainstream needs to accept btc so that people will start treating as something useful and not some shady curency used by shady people.

thanks.

As I heard transaction speed is slow in BTC. That is why some people are recomonding Bitcoin cash over btc

a) Storage ( Everyone does not have infinite amount of storage, hence if blockchain gets biggers, we risk centralization to biggest storage miners )
b) China ( Great Fire Wall of China )
c) Bandwidth ( Bigger blocks cannot travel faster to all miners )

Each block can only contain 1MB of data and a transaction will use about 495 bytes of data. As a result, around 2000 transactions can only be processed by each block. Also, every 600 seconds a new block is mined. Using this, bitcoin can only process around 3.37 transactions per second. Paypal can handle 193 and Visa 1667 transactions per second. Bitcoin still needs more upgrade to compete with these.

You can read book which is "Understanding Bitcoin: Cryptography, Engineering and Economics by Pedro Franco" page 121.

              The bottleneck condition occurs for the Bitcoin whenever the crowding of transaction in the form of asset. In order to overcome such obstructions we need the high speed computer net work. According to the Bitcoin history reveals that the Bitcoins starting time the volume of acceptance was low and now it has considerably increased.

Bitcoin needs more transactions per second to be done, to be able to handle mainstream adoption and the default method to do that was to increase the Block size as adoption grows. Some developers differ from the traditional method and introduced methods like SegWit to streamline the data that goes into every transaction. < stripping unnecessary data from every transaction >

Then come the Lightning Network proposal, where small payments are bundled and only writtento the blockchain at the beginning and end of their execution. These tx's run via side channels and not on the actual Blockchain.

Good luck with the project.

a) The blockchain is updated just once every 10 minutes. -- This is an important feature of Bitcoin that ensures that the globally distributed, peer-to-peer network is always able to reach consensus.

b) Blocks can only hold a few thousand transactions each. -- Like (a), this is an important feature of Bitcoin. If a block contained too many transactions, it would threaten the network's ability to reach consensus before the next block arrived (approximately 10 minutes later).

c) The size of the blockchain continually grows over time; it will likely grow between 50-100GB per year for the foreseeable future. There is no way to reduce the size of the blockchain. The cost of storing the blockchain is not a serious problem but every block added to the blockchain increases the time required for a full-node to join the network. If (c) is solved one day, that solution may be able to contribute to alleviating both (a) and (b) by allowing Bitcoin nodes to join quickly to handle network congestion and go offline when the network is quiet (this is called "horizontal scaling").

Note: Lightning networks will help alleviate both (a) and (b) by moving most small transactions "off-chain".

A. Centralization - Idea of mining it, many people who first come across with bitcoin, seems bizarre. Once you broke it down into a P2P way of confirming transactions, it makes a lot more sense. It will make more sense though, when any node, on any computer, will be given or had a chance to confirm transactions and be rewarded a block. But, because of ASIC and mining farms, that doesn't happen anymore. Even BTC was created w/ good intentions that will improve our technology, there are systems exploited. And this is what has happened to the network. The main problem here is that even if you could run a node, the incentive is very little. Again, this is due to powerful machines (ASICS or FARMS) that is built specifically to target BTC's SHA-256 POW algo that changed its decentralization and became more open in nature.

B. Actors - Due to its anonymity, BTC is vulnerable to such bad actors and it doesn't cater for mistakes, theft and fraud quite well. The anonymous characteristics of digital currency has attracted people whom intentions are to look for prey who might or will fall unto them because of the never ending upward trend of its price. Whether it is an illegal online market, Pump and Dump or shady coin exchange site, they create a bad image over the crypto industry. And, every time there is a bad news that relates to bitcoin because of this kind of people, it draws a lot of attention from the mainstream.

C. Government Regulation - Few countries have taken serious action on BTC. They have taken regulatory action which we can consider either hostile or contentious. A good example of this is India and China, where their government crack down and cease all bitcoin related businesses. These stances against digital currencies appear to be more reactionary than justified. And if you look at it, these government actions reflect that they still support their country's financial system (banks, etc.) and it only reveals that they don't want to compete with bitcoin in which they would rather regulate it out of existence. Regulatory policies doesn't really help ti digital currencies not only in bitcoin, because of the decentralized nature of it, which makes it impossible to ban.

D. Mobile Support Platform - Even there are sites or applications which are bitcoin or altcoin related, the major players doesn't seem to support digital currencies quite well. A good example: Apple and Google won't allow payments with bitcoin or other digital currency related. But, this does not stop developers to create a site or app for bitcoin and altcoin, the bad thing is that they are harming the ecosystem of the crypto industry. Because of these major players acting the same with the government, it seems that they are more likely doesn't want to compete with it.

E. Adoption - Given the popularity and its current status, there are still a lot of people (which margin is way, way to wide) that do not want or seems interested to adopt digital currencies. A good reason for this are the situations that I mentioned above (From A to D).

Right now Bitcoin is having massive power consumption for mining and we have to add the fungibility and scalability issues as others have said
But I would also add one big problem STIGMA bitcoin has received massive negative press because of its use in the silk road and other deep web markets which has caused a lot of bad impressions for the coin

Could you go into specifics about the scalability bottlenecks?

a) scalability needs solving

b) centralised mining needs to be addressed

c) fungibility needs to be addressed, each bitcoin should carry no history thereby no historical luggage.

d) QC resistance needs to be added

Could someone please list them?

Sort of like this:

a) ...
 
b)...

c)...

I really need this for a school project. Thanks!