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image source: https://www.coindesk.com/what-is-the-bitcoin-block-size-debate-and-why-does-it-matter
How many transactions can a blockchain actually handle? Truth be told, this is a trick question, since any and all blockchains try very different solutions to the scaling problem.
One solution that stands out is the “large blocks” idea. Imagine a bus stop with multiple passengers waiting for it - will it not make sense to just send bigger buses? This will definitely help to noticeably cut down the queue. Block production is similar - how much of the mempool can miners grab and put into a block?
But that task isn’t so easy. The current Bitcoin block size is 1 MB, though without a hard cap and often going to 1.4 MB or below. There is currently no clear consensus on what makes a block “big”, though there are some chains with the smaller block size preserved.
In the case of Bitcoin, the current size is the heritage of Satoshi Nakamoto’s early intervention, when the block size was capped at 1 MB. After a series of tests, the current BTC limit is soft-capped between 2 and 4 MB with SegWit transactions, though the real block filling is somewhat lower.
But then projects appeared that wanted to test the limits of block size for scaling, and they stood firmly in the camp of allowing as big of blocks as possible. We picked some examples of allowing more block space, as one potential on-chain scaling solution.
Bitcoin SV - This project split off dramatically from Bitcoin Cash in November 2019 after a dramatic 10-day hashing war. Bitcoin Cash (BCH) had already agreed on a hefty large block of up to 32 MB, but Bitcoin SV wanted more - not only the BCH ticker but also a change to the underlying protocol.
Bitcoin SV, short for Satoshi’s Vision, wanted very large blocks, which would then be propagated among well-established, known, and pre-screened node operators. The attempt to take over the BCH ticker failed, and BSV spun off as a new asset.
Over time, the network tried creating and propagating larger and larger blocks filled with various types of data. The current record is held by a block from March 2021, which holds 638 MB of data, equivalent to a few hours on the Bitcoin network. Bitcoin SV has been one of the loudest large block proponents, going so far as to claim it has propagated the biggest blocks so far.
Bitcoin Cash continues to exist with the BCH ticker and has set its potential block size to 32 MB. BCH still wants to achieve the sweet spot between a fully decentralized network and large blocks that do not allow for congestion and keep fees low.
Indeed, BCH has achieved this. It has managed to cap its fees to around $0.03 in even the busiest times since 2018. But BCH is still a network with relatively few transactions, only reaching about 100K per day in the past quarter. BCH has performed tests for microtransaction loads, expecting to see a large block propagate. But in reality, the network handles blocks well within the limit of Bitcoin’s range. Some miners even continue to cap their blocks at 2 MB, and there is no coordination to propagate the blocks.
Initially, BCH was considered ripe for corporate takeover, though it has not reached the intended size of the Bitcoin SV hard fork. So far, the network remains decentralized, handled by regular anonymous miners.
ILCOIN is a rare altcoin that offers large blocks. Most altcoins limit their carrying capacity below 1 MB, due to their relatively small network load.
Notably, ILCOIN did not reach the idea of large blocks through a seething conflict, as the BSV and BCH projects did. Instead, ILCOIN aimed to achieve a high-throughput blockchain that could store varied data.
Blockchain storage, where information can be time-stamped, hashed, and completely tamper-proof, still relies on external file writing. The chief reason being that a block can only contain transaction information, rarely images or larger amounts of data beyond a small message.
ILCOIN, however, has proven it can mine and distribute a block that is a record not only for its blockchain, but for the crypto space in general. ILCOIN mined and distributed a 5GB block, proving it can store data safely as needed.
ILCOIN manages to store that amount of information in each block due to its unique data structure of blocks within blocks. Network users can generate mini-blocks, which are not mined. Then, the hashes of those blocks are included in the large blocks and mined formally.
This project uses a level of centralization to produce the large blocks, but the creation of mini-blocks is decentralized and accessible on a global scale through cloud-based computing.
ZCash (ZEC) has early connections to the Bitcoin blockchain, as it used the Bitcoin Classic code. ZCash was built with the corporate world in mind and runs a separate blockchain.
For now, ZEC has decided on a 2MB block, which is sufficient for the current transaction levels. But based on the initial Bitcoin concept, this block can be counted as relatively large.
However, ZEC isn’t aiming for high-level scaling and only expanded its block to ensure some redundancy. Often, blocks fill up to about 6KB, reflecting real-world usage.
Cardano (ADA) may first appear to be an unlikely candidate in the big-block solution team. ADA actually allows for a 2MB block limit, potentially ahead of the likes of Litecoin (LTC) though. Since ADA wants to compete with Ethereum (in terms of block size), it is still ahead of the game, with ETH blocks carrying 20 to 30 KB every minute.
For Cardano, the network itself was built with fast scaling in mind to satisfy the demand of distributed apps and smart contracts. For that reason, a new block is minted every 20 seconds. In theory, Cardano could scale its transactions, though for now its blockchain remains mostly empty.
Still, ADA is one example of blockchains intended for high loads incorporating a relatively large block to its solution. For ADA, the blocks themselves are still small enough to be distributed without much centralization, using staking wallets as nodes. ADA transactions are also capped to 7 KB per single transaction, thus aiming to maximize the potential number of transactions per second. For ADA, this metric would be above 200 transactions per second, satisfying the project’s goal of achieving speed before all else.
Large blocks are, before everything else, a solution that removes some of the old barriers to blockchain usage. The question of the right block size is still rather contentious, breeding intense discussion between the various teams behind the Bitcoin forks. But a larger block size can be a viable solution for new use cases for the blockchain, doing away with the deliberate limitations.
In short, a large block can be meaningful when it is a central feature of the blockchain and not just a sporadic artifact, as in the case of Bitcoin SV.
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