Solving Bitcoin's Scalability Problem

Bitcoin enthusiasts have long been working toward pushing the cryptocurrency into mainstream use to compete with paper money and credit card transactions. However, now that new exchanges for buying and selling the digital currency are beginning to gain momentum as more of the public is takes an interest, many are wondering whether or not bitcoin will be able to handle a steep rise in transaction growth.

Although blockchain has been touted as one of the greatest technological advances of the decade, the ledger-like system does have limits. Since each node of blockchain records every single transaction, the cost of running nodes will likely outweigh the benefits of using them if bitcoin grows into a mainstream payment method. Most believe that bitcoin as it is now could not function as a payment platform on its own.

Joseph Poon and Thaddeus Dryja say their latest development, the

, can help. The lightning network allows some transactions to take place off of the blockchain and broadcasts only the final, necessary transaction information to the entire blockchain. The blockchain's ledger, accessible to everyone, would still have record of the transaction, but not any intermediary dealings that may have taken place.

The Bitcoin Lightning Network presents an exciting solution to bitcoin's scalability problems, but there are still several issues that need to be worked out before the network can be developed or considered as a viable way to do business.