05-21-2016, 06:48 AM
To prevent things from becoming completely unwieldy, the Bitcoin protocol limits the size of each âblock,â the basic unit of Bitcoinâs shared transaction register, to one megabyte. Since one block is created every 10 minutes, on average, this places a hard limit on the number of transactions the network can process each hour.
Right now, the network is operating well below the limit. But itâs not that far below the limit. If the Bitcoin economy continues to grow rapidly, weâre likely to hit it in the next few years.
Reaching the limit wouldnât be catastrophic; the Bitcoin protocol has an elegant system of transaction fees to process the most urgent transactions first. But it does place some limits on Bitcoinâs long-term future. For example, itâs hard to imagine Bitcoin ever becoming a replacement for conventional credit cards. There are far too many credit card transactions for the Bitcoin network to accomodate.
Right now, the network is operating well below the limit. But itâs not that far below the limit. If the Bitcoin economy continues to grow rapidly, weâre likely to hit it in the next few years.
Reaching the limit wouldnât be catastrophic; the Bitcoin protocol has an elegant system of transaction fees to process the most urgent transactions first. But it does place some limits on Bitcoinâs long-term future. For example, itâs hard to imagine Bitcoin ever becoming a replacement for conventional credit cards. There are far too many credit card transactions for the Bitcoin network to accomodate.
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