Solving the Transaction Capacity Problems

One of the solutions proposed was to increase the size of the block from 1MB unit and allow more transactions per block.

A hard fork is required each time when the block size is raised. It means that a totally new copy of the chain must be created. Of course, it’s possible to increase the block size to cope with the backlog transactions. But the users’ database keeps growing and there will be another backlog again. That’s why another increase of the block size will be needed probably and another hard fork as well.

Why not to make the block size large enough to ensure a successful transaction no matter how many users there are.

First off, the large block size would be pretty impractical and would cause a situation in which only really large corporations could be able to maintain a process. Thus, a big block size for the population of just one city would limit mining and node hosting only to massive businesses.

Besides, Nick Szabo, a blockchain pioneer, stated in his interview that the small size of the block is a security parameter preventing network from flooding.

So, if the block size can’t be increased, what should be done? Well, for solving the issue there are several solutions expected to be deployed:

SegWit (Segregated Witness)

Multi-Layered Solutions

Schnorr Signatures