>**This year, Bitcoin’s price has risen 17 times, but issues with transaction fees and transaction speed mean it will be difficult to scale. "The price of Bitcoin has soared recently, and this is the shout of loyal believers of Bitcoin.

2025/04/2214:07:35 hotcomm 1447

This year, the price of Bitcoin has risen 17 times, but issues with transaction fees and transaction speed mean it will be difficult to scale.

"Break through the sky!" The price of Bitcoin has soared recently, and this is the shout of Bitcoin's loyal believers. However, in addition to spawning a new group of cryptocurrency millionaires, Bitcoin’s recent rise has also exposed the long-standing flaws of its underlying technology, which may cause damage to the perpetual usability of Bitcoin.

Bitcoin is a gift to the world by Satoshi Nakamoto (Satoshi Nakamoto), the anonymous person released the Bitcoin design in a 2008 white paper. They complained in the white paper that traditional financial institutions have set unnecessary obstacles: banks and other intermediaries use transaction fees to pass on costs, making "small temporary transactions" impractical.

Satoshi Nakamoto said that Bitcoin will change this situation by using an P2P (point-to-point) network to verify transactions, powered by unbreakable mathematical principles, eliminating the need for central institutions. The white paper does not use the term " micropayment ", but it clearly mentions its concept that small-scale digital transactions can change the economics of the Internet or help people in developing countries.

Nine years later, Satoshi Nakamoto's invention achieved great success.

A bitcoin is now worth $17,500 (data on December 13), and has risen 17 times since January (latest data: it fell to $10,770 on the evening of December 22, down 40% in five days). However, this cryptocurrency has not allowed us to enter a new era of economic enlightenment supported by microtransactions. One of the reasons is that Bitcoin, which Satoshi Nakamoto invented to avoid transaction fees, also has the problem of transaction fees.

Participants in Bitcoin transactions need to pay a handling fee to ensure that the global computer network that manages this currency will process their own transactions. As of the afternoon of December 12, an approximately $19 handling fee is required to make a Bitcoin transaction complete within 10 minutes. It is estimated that if you only pay a $3 handling fee, your transaction will take about 24 hours to complete processing. Want to pay your friend the money for buying pizza? It's better to use Alipay.

game platform Steam recently announced that it will no longer support Bitcoin payments, and the reason mentioned that the transaction fee is too high. Earlier this month, Erik Norland, a senior economist at CME, a financial derivatives market company, said high fees could cause Bitcoin’s current price rise to stagnation.

The transaction fee for Bitcoin is so high because by the standards of modern digital infrastructure, the P2P network that drives Bitcoin is very limited.

, a professor at Cornell University who has studied Bitcoin design, estimated that in the most ideal situation, the Bitcoin network can process 7 transactions per second, but this number can generally only reach 3.3. By comparison, Visa reported that between July and September, they processed 29.2 billion transactions, or 317 million transactions per day, or 3,674 transactions per second.

Recently, Preethi Kasireddy, an blockchain entrepreneur who worked for Goldman Sachs and venture capital firm Anderson Horowitz Fund, wrote a detailed article, warning about the technical limitations of Bitcoin and related systems. She said that the underlying Bitcoin technology known as blockchain is not suitable for large-scale applications at its current stage of development.

"To become mainstream, something must be scalable," said Catheridi.

Bitcoin transactions are driven by "miners" engaged in "mining", running software originally designed by Satoshi Nakamoto, a network of software that handles transactions. The frequency of confirmed new transactions to the Bitcoin digital ledger (i.e., blockchain) (currently, 1 new block is generated every 10 minutes), and the way the Bitcoin protocol sends data over the network, these two factors determine the capacity of Bitcoin.The bottleneck

is deeply rooted in the current design of the Bitcoin system. Cyrell and one of his graduate students have developed a software that tracks Bitcoin networks spread around the world. Their monitoring shows that during 2016, thanks to upgrades to computer and telecommunications networks, the underlying hardware infrastructure of the Bitcoin network increased by about 70%. However, the number of transactions that the Bitcoin network can handle is roughly the same as before. "This is a very strange thing," said Sirell. "Basic networks are getting faster and faster, but the Bitcoin network protocol cannot be used."

, as the second largest cryptocurrency system, has also been dragged down by expansion issues recently. Recently, a trading game called "Crypto Cat" has soared popularity, where players can buy and raise virtual cats. A large number of player activities have caused the game platform to start to receive transaction fees, and the number of transactions waiting to be processed has also surged.

To make these networks more scalable, cryptocurrency enthusiasts have come up with various ideas.

In August this year, a group of people worried about capacity issues launched a new currency called "Bit Cash". Since its debut, the price of Bit Cash has tripled and is now about $1,600. However, the attention it has received is far less than Bitcoin. In 2015, Cyrell and his Cornell colleague Ittay Eyal designed the Bitcoin-NG protocol. A startup called Waves adopted the protocol, which the company says can process thousands of transactions per second.

Bitcoin dominates the curiosity of people about cryptocurrencies, and in the short term, no other currency seems to be able to pose a real challenge to it. Some investors who have made a lot of profits from the recent rise in Bitcoin believe that it does not require a significant expansion—those people regard Bitcoin as a "store-value currency" like gold, rather than the currency in circulation described by Satoshi Nakamoto. Others, including Buffett , retorted that the lack of basic usefulness is a fatal problem for Bitcoin. Goldman Sachs CEO also recently stated that Bitcoin is too volatile to be an excellent stored-value currency.

Some Bitcoin believers involved in maintaining the network and code are thinking about how to find a way to expand to achieve Satoshi’s original idea. However, Catheriti reminds that there are currently no technically proven options for large-scale deployment. Even if there is such an option, Bitcoin lacks a clear mechanism to complete the upgrade, which stems from Satoshi Nakamoto's decentralized design.

"There is no real governance process here." she said.

The meaning of Bitcoin is far more than price.

Translation: He Wuyu

Source: WIRED