Bitcoin has survived the most sophisticated attacks ever devised against any modern consumer technology. There’s probably not a single mass consumer product which has been tested more aggressively and through more advanced methods than Bitcoin.
But there are still some problems to solve. Specifically, scaling up to be able to handle as many transactions per day as the major payment systems do today.
Bitcoin blocks are mined in approximately evenly spaced periods. This was coded by Satoshi Nakamoto, on the original Bitcoin source code, to be ~10 minutes per block. This parameter has been maintained the same by the Bitcoin Core team and remains constant to this day. Every few days the network difficulty gets readjusted to maintain a 10 minute per block period. The time in between Bitcoin blocks has often been the target of attacks which exploit the network difficulty until it is adjusted. In the historic mempool size chart you can view spikes in the mempool which were caused by attacks on the Bitcoin network. These spikes were caused by large miners removing their mining equipment from Bitcoin and from DDoS style attacks where millions of bogus transactions were pumped into the Bitcoin network in order to delay transactions. Huge spikes in unconfirmed transactions can be seen in May and November 2017:
During these periods it became clear that Bitcoin required better protection against these sorts of attacks. It was hotly debated whether Bitcoin should increase its block size to accommodate the increasing number of transactions per second. But the result was a split: Bitcoin Cash proponents believe Bitcoin blocks should be larger, while Bitcoin Core developers think the original 1 MB block size is enough. Segregated witness (segwit) has, in practice, increased the Bitcoin block size to several megabytes. While the protocol still sees 1MB blocks, the actual amount of data per block is several MB in size, just not stored in the original TX data structure within the Bitcoin blocks, but in a separated space.
Each full Bitcoin node requries around 150 GBytes in initial disk space at the time of this writing (May 2018) and approximately half a gigabyte download amount per day and 10 times as much for upload. Bitcoin is an asymmetric protocol and requires 10X more upload bandwidth than download. A typical Bitcoin Core node will upload around 5 GB per day on average. RAM and CPU demands are not very stringent. Bitcoin can work on any machine with at least 1 GB RAM. For updated requirements, see the Bitcoin.org website.
From these requirements it is easy to see that Bitcoin is not a particularly demanding protocol. Even if the network were to scale to several times its current size, something which is totally expected in the coming months/years, Bitcoin is capable of handling the new load provided that miners maintain their current rate of adoption. On the above chart it is visually obvious that there is currently no overload on the Bitcoin network, no unconfirmed transaction excess on the mempool and the Bitcoin network has never processed more transactions than in recent months!
The Lightning Network is one of the great 2nd generation applications running on top of raw Bitcoin. It is a neat new protocol that creates P2P tunnels among network participants. Each tunnel allows for certain amounts of Bitcoin to be instantly exchanged. How a transaction finds its way to the destination is an application of graph algorithms where pairs of participants form paths through which the transactions are routed. Everything gets committed onto the blockchain, as expected, and the system is 100% secure just the like underlying raw Bitcoin protocol itself. Lightning Network promises to set a new standard for transaction speed on the Bitcoin network. In fact it is already being used by Bitcoin consumers which have published their experiences online. As is already a classic in cryptocurrency culture, of course you can order pizzas using Lightning Network.
Bitcoin will gain wider commercial adoption in the coming years and everything seems to indicate that it is ready to scale. With more and more shops accepting BTC as a payment form, there’ll be a natural spike in interest for this fabulous cryptocurrency. Second layer technologies such as Lighning Network promise to allow for thousands of transactions per second, finally giving Bitcoin the performance credentials it requires to overtake plastic money as the #1 payment medium.
Bitcoin Pizza Image Credit: Laszlo Hanyecz