The Bitcoin scaling debate goes on and on. The argument is not over whether Bitcoin should scale up: clearly, if it is to become a serious challenger to mainstream payments providers such as Visa and central bank RTGS systems such as Fedwire, it must be able to handle daily transaction volumes in the billions. No, the question is how it should scale up.
There are basically two camps: those who follow the original thinking of Bitcoin’s creator, Satoshi Nakamoto, that all transactions should be on-chain and democratically validated, and those who think that the way forward is to take most transactions off-chain, leaving only large transactions (perhaps made up of thousands of netted small transactions) on the main blockchain.
There is little doubt that the network could scale up to handle Fedwire volumes. Technology is not the problem. The problem is price – and in particular, the price of transactions.
Visa processed 37 billion transactions in FY2008, or an average of 100 million transactions per day. That many transactions would