The Bitcoin blocksize debate
A lot of people new to cryptocurrency question the transaction speed/fees and the simple answer to that is they are due to the blocksize. So before we get to the debate, lets just consider what this blocksize business is all about…
BTC’s blocks are limited to just over 1MB. This means each one can hold limited transactions, paying higher fees is like paying for a ‘fast pass’ to make sure your transaction is in the current block therefore will get processed faster. If time is of the essence, yes higher fees are a necessary evil in order to get your transaction processed faster.
This brings us to the discussion: why not up the blocksize?
Turns out this isn’t a new discussion at all. In fact, this discussion is what led to the BTC/BCH forks. The community couldn’t reach an agreement on whether or not blocksizes should increase and this led to the two opinions (high block size vs low blocksize) splitting into BCH and BTC respectively.
So big blocks, good or bad?
Well this is a matter of perspective. Bigger blocksize allows for faster transactions and lower fees BUT as with anything, theres a trade off: decentralisation. A bigger blocksize means running nodes is more resource intensive, this means people can no longer run nodes and whatnot on normal day to day laptops, instead it requires expensive specialised equipment. Not the kind of thing you find in a normal persons home. Bigger blocksizes limit nodes to firms/tech based facilities and therefore takes that decentralisation away from the ordinary person, instead forcing us to trust ‘the system’.
The small blocksize wont be sufficient forever but the larger ones are too resource intensive to be able to claim true decentralisation. Segwit is a current solution and some people also claim lightning network is (although this is up for debate still) but none the less, for BTC to remain the market leader future development will be needed to stay competitive.
