In Depth


Scalability refers to how well a technology can grow while still maintaining efficiency. 

Blockchain technology is a beautiful masterpiece of intertwining cryptography, computer science, and mathematics. 

But as is the case for most theoretical constructions, real-world application often brings about a slew of unforeseen complications. In the case of blockchain technology, one of the more prominent issues is scalability, and it isn’t going away any time soon.


What do we mean by scalability? Let’s outline the problem:

You’re a miner, and when you fill a block you can only squeeze so many transactions into it. Let’s say that the blocks you’re working with can accommodate a total of 10 transactions. Fortunately, there are only 10 transactions that need to be added to the blockchain right now.

Great! You put them into a block, run your computers, and hope that you’re the lucky winner of the block reward and transaction fees. (For a more in depth explanation of this process, see Mining).

Let’s fast forward a few years. You’re still mining your chosen blockchain, but it has skyrocketed in popularity. Now, instead of 10 transactions waiting for confirmation, there are 10 million. Hm.

Most transactions are going to have to wait around for quite a while before they’re added to the blockchain. We say “most” for a reason–the people who choose to offer high transaction fees won’t see any decrease in performance. All the miners want to maximize their profits, so these transactions will always be added first.

Only a few transactions can be added to blocks at a time, creating a bottleneck.

The end result? High wait times and steadily increasing transaction fees, due to rising demand for miners’ attention.

Well, shoot. One of the major advantages to cryptocurrency in the first place was reduced transaction cost!

As it turns out, this issue is being played out right now with Bitcoin, which has grown recently in both transaction fees and waiting times.

As we mentioned, this is known as a scalability issue, because there are problems associated with scaling up the number of users utilizing the blockchain. Fortunately, developers have been hard at work trying to crack this problem. Let’s take a look at what they’ve come up with!


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