(Alien Concept: Segregated Witness explained in 15 seconds)
Without a doubt, one of Bitcoins biggest criticisms over the last 2 years which has brought into question its potential longevity and negatively impacted Bitcoin price & sentiment, has been the question surrounding the Bitcoin networks ability to scale.
With a current soft limit of 7 transactions per second. Due to the amazing success of Bitcoin and the high level of demand on the network since its inception; all too often Blocks containing all transactions that occur over a 10 minute period on the network have become full; leading to transaction delays & increased transaction fee’s as users try to ensure quick transactions.
Bitcoin sceptics quickly jumped on these issues as reasons why Bitcoin could not reach mainstream adoption, as network capacity would not be able to scale to support a larger user base without serious implications for the cost and speed of transactions.
However as we enter Q4 2016 , new technology & software patches ( ‘Lightning Network‘ and ‘Segregated Witness’ ) look to be on the verge of addressing these long standing issues and at the same time, potentially increasing the attractiveness of Bitcoin as a long term investment opportunity.
Segregated Witness :
Segregated Witness will essentially almost double the amount of transactions that can occur on the Bitcoin network every 10 minutes, without causing congestion and thus higher fee’s and according to Bitcoin Core project, we are now into the final countdown before it goes live.
— Bitcoin Core Project (@bitcoincoreorg) 27 September 2016
Lightning Network technology centres around building an additional transactional layer onto the Bitcoin network to allow for a huge increase in the amount of transactions that can occur off the space limited main Bitcoin Blockchain. Theoretically, this will allow the Bitcoin network to facilitate over 100,000 transactions per second, as well as allowing for instant transactions.
To put this into perspective the Visa network currently handles around 2000 TPS and has a maximum capacity of 56,000 TPS.
Perfect for microtransactions, lightning network technology could help ensure that Bitcoin facilitates its original stated function of a peer to peer electronic cash system, as well as what I currently see as its primary function right now; a counterparty and inflation hedge asset similar to precious metals.
Adding to speculation that a viable lightning Network implementation may become reality in the near future, is a recent announcement from BitFury group, that specialise in developing Blockchain technology, including ‘Flare’ there test system for the Lightning network concept.
After a recent successful test of there ‘Flare’ system, Valery Vavilov, CEO of The Bitfury Group stated:
“This success exemplifies why The Bitfury Group is committed to research and to supporting the implementation of Lightning Network. Our dedicated engineers as well as our fellow Blockchain companies are committed to the success of Lightning,” said Valery Vavilov, CEO of The Bitfury Group. “This test of Flare, with small modifications made by the ACINQ team, shows that our solution is not only theoretically feasible, but successful. We are now one step closer to bringing the Lighting Network into reality and solving the scalability issue of the Bitcoin Blockchain.”
As more and more companies inch closer to successful lightning network implementations, alongside Segregated Witness. We may soon have Bitcoin network scaling options that finally answer long standing doubts, that Bitcoin can scale sufficiently to make it a viable global platform.
In doing so, it may very well be one of the catalysts for new all time highs in the Bitcoin price in the near future.
So Bullish on #Bitcoin right now:
Possible DeutscheBank Bailin
Cont. Yuan Devaluation
First BTC ETF pending
Growing use cases
— Renegadeinvestoruk (@sharkybit) 26 September 2016