Bitcoin Foundation chief scientist Gavin Andresen has proposed increasing the number of transactions allowed on the bitcoin network by raising the maximum block size by 50% per year.
Doing so would require a hard fork and "some risk", Andresen conceded in a new Bitcoin Foundation blog post, but he concluded that such proposals are necessary for the long-term viability of bitcoin as a global payments system.
Entitled A Scalability Roadmap, the piece builds on Andresen's past statements regarding how he believes the bitcoin network can be scaled to handle more transactions. While the near-term need to do so may not seem apparent, Andresen wrote, an opportunity to address the bitcoin network's scalability needs shouldn't be missed.
Andresen suggested that the bitcoin development community's consensus-driven decision-making process might result in an alternative solution or even multiple fixes to scalabiilty. Still, he argued that the limit on bitcoin transactions has been identified in the past as a weakness in need of addressing.
"Agreeing on exactly how to accomplish that goal is where people start to disagree - there are lots of possible solutions. Here is my current favorite: roll out a hard fork that increases the maximum block size, and implements a rule to increase that size over time, very similar to the rule that decreases the block reward over time."
Andresen added that the development community has always intended to raise the block size, but that a long-term scalability fix has yet to take place.
Bigger blocks are better
The bitcoin network is currently experiencing 50,000-80,000 transactions per day. As Andresen noted, however, the data needs being placed on the bitcoin network aren't huge, making the 1-megabyte block size sufficient for use today.
In the long-term, though, this block size may lead to issues, Andresen wrote, arguing that the need to take action makes sense not only from a practical perspective but also an ideological one.
Andresen said that a hard fork to increase the block size is in line with the spirit of bitcoin, arguing:
"I think the maximum block size must be increased for the same reason the limit of 21 million coins must NEVER be increased: because people were told that the system would scale up to handle lots of transactions, just as they were told that there will only ever be 21 million bitcoins."
Andresen suggested that the inflection point for the bitcoin block chain may come during a future price upswing, an event that has historically been associated with an increase in the number of bitcoin transactions.
Any fix needs time
Acknowledging the challenges involved, Andresen conceded that the process won't be easy. However, he said that such work is inevitable, noting:
"Getting there won't be trivial, because writing solid, secure code takes time and because getting consensus is hard. Fortunately, technological progress marches on, and Nielsen's Law of Internet Bandwidth and Moore's Law make scaling up easier as time passes."
Andresen posited that the 50% annual growth rate he suggested would enable the distributed network to facilitate as many as 400 million transactions per day if implemented now. After 12 years, the bitcoin network's estimated transaction capacity would reach 56 billion transactions per day, according to Andresen's initial calculations.
This, Andresen said, would put the bitcoin network in a position to serve as a truly global value exchange system.
"Even if everybody in the world switched entirely from cash to bitcoin in 20 years, broadcasting every transaction to every fully-validating node won't be a problem," he concluded.
Image via Shutterstock