The Scaling Bitcoin workshop held in Montreal, Canada from September 12-13 aimed to discuss several issues currently affecting the industry. One of the biggest topics on the table was that of the block size limit, which could be addressed through scalability.
Among the presentations made during the bitcoin conference was on the scalability of non-currency applications, discussed by Harry Kalodner of Princeton’s Security and Privacy Research Group and assistant professor of computer science at Princeton Arvind Narayanan.
Scaling Solutions for Bitcoin
As it is, the bitcoin network has been subjected to a hard fork, with some developers favoring the Bitcoin XT software that allows a shift from a 1MB to 8MB maximum block size. Others, however, thought it best to stick with the Bitcoin Core version that is reportedly more stable.
In their presentation during Day 2 of the conference, Kalodner and Narayanan discussed the various non-currency applications of bitcoin and blockchain. After all, the distributed public ledger has been enjoying the spotlight these days, thanks to its numerous applications in record-keeping and trade settlement.
Among the applications presented are the use of blockchain in stock trading activity wherein each trade could be recorded as a transaction on the blockchain. The presentation shows that NASDAQ handles approximately 10 million trades each day while the NYSE has 3.5 million trades per day, comprising a large volume of entries on the bitcoin ledger.
Another potential application of blockchain is on car ownership, which can allow the ledger to track transfers of assets. The speakers noted that there are around 245 million cars in the United States alone, also underscoring the fact that a large number of entries need to be stored.
The duo suggested the use of “colored coins” wherein specific outputs get extra information, such as that for stock trades or those for car sales, but everything will still be recorded on the chain. Another possibility is to use altcoins or a different blockchain for separate counterparties, but this could wind up fragmenting the entire system.
The presentation concluded by showing that scaling solutions might then require higher fees and off-chain transactions through exchanges. For them, the sheer number of applications for blockchain technology suggest that the industry is prime for an explosion but that some scalability solutions might not fit for all.