Bitcoin heads to 33.000$ after a week of ups and downs
The succesful traders are trading below the price and they are looking to exit around 40.000$ their positions.
We’ve seen lot of people looking to invest this week, as the up trend keeps going.
“Some time ago I came up with a direct comparison between pre-SegWit and post-SegWit. In this back-of-the-envelope calculation for optimal conditions (smallest possible transactions) SegWit nearly doubled the capacity of the network (from 5,200 [transactions]/block to 12,100 [transactions]/block) by optimizing how information is stored,” he said.
Decker added that this scenario is a bit optimistic, because it’s predicated on using the smallest possible transaction size. That said, upcoming upgrades — Schnorr signatures and Taproot — make it more realistic.
“However, with Taproot and Schnorr we can get closer to this optimistic scenario, by further compressing common scripts and reducing the size of multisig transactions to be identical to single-sig transactions,” he said.
Decker suggested that estimating a maximum number of transactions per second is not very informative, since it can vary quite widely depending on the nature of the transactions. Christopher Bendiksen, the head of research at CoinShares, also shares this view, while adding that Bitcoin is already capable enough to serve numerous useful purposes.
“In my opinion, the theoretical limit isn’t actually that interesting and is more or less an academic exercise that is highly dependent on assumptions on user behaviours that are often entirely unrealistic. Bitcoin clears a similar amount of daily transactions as competing systems like FedWire and the mempool [where all the valid transactions wait to be confirmed] regularly clears indicating a sufficient settlement transaction capacity,” he told Cryptonews.com.
Lightning Network to the rescue
In other words, Bitcoin is quite capable of accommodating a significant degree of adoption and use all by itself. Nonetheless, most agree that it needs help from layer-two solutions if it wants to become something like a nationwide or international payment system used regularly by thousands or millions of people.
“It’s of course important that on-chain transaction capacity keeps getting optimised, but it is layered solutions that enable Bitcoin adoption on a global commercial scale, as we’ve just observed in El Salvador,” said Bendiksen.
El Salvador is turning to the Lightning Network to make widespread bitcoin payments possible in the Latin American nation, with LN capable of a potentially infinite number of transactions per second.
“There is no transaction capacity on the Lightning network — it’s unlimited, infinitely surpassing the capacity of centralised layer-2 alternatives like Visa and MasterCard,” according to Bendiksen.
Others agree, although some note that there are still certain technical challenges which need to be overcome in order for LN to attain massive scale.
“The Lightning Network itself has no limit on transaction capacity. One possible limitation may be the requirement to open a payment channel and then manage the channel balance — but we already see emerging solutions such as batch channel management, channel factories, etc.,” said Josef Tětek, Satoshi Labs, the manufacturer of the Trezor wallet, brand ambassador.
Critics have suggested that the Lightning Network may tend towards centralization of payment channels. However, most contend that it’s the only viable way for Bitcoin to substantially expand its capacity, with Christian Decker explaining how it does this.
“The way Lightning achieves higher scale is by moving transactions off-chain, but keeping these off-chain contracts rooted and eventually settled on-chain. This means that rather than being a limit on the transfers, the blockspace limit now becomes a limit on the number of these off-chain contracts being created and settled,” he said.
Scalability isn’t an issue, usability is
It’s thanks to the Lightning Network that El Salvador was able to proceed with its plans to make Bitcoin legal tender, although it remains to be seen just how successful its embrace of the cryptocurrency will be.
However, for many experts and commentators, the issue isn’t really whether Bitcoin and/or the Lightning Network is technically capable of handling a massive number of transactions. Instead, it’s usability, with a level of experience and expertise still arguably being required to use Bitcoin with ease.