What is Scalability?

Scalability refers to a blockchain’s capacity to process more transactions as demand grows. A scalable network can handle increased usage without significant slowdowns or fee increases while maintaining security and decentralization.

The Scalability Trilemma

Blockchains typically struggle to optimize all three:

  1. Security: Resistance to attacks
  2. Decentralization: Distributed control
  3. Scalability: High transaction throughput

Improving one often comes at the cost of another.

Current Limitations

Bitcoin

  • ~7 transactions per second (TPS)
  • Block time: 10 minutes
  • Limited by design for security

Ethereum (Layer 1)

  • ~15-30 TPS
  • Block time: 12 seconds
  • High fees during congestion

Comparison

  • Visa: ~65,000 TPS capacity
  • Solana: ~65,000 TPS theoretical

Scaling Solutions

Layer 1 Solutions

  • Larger blocks (more transactions)
  • Faster block times
  • Sharding (splitting the network)

Layer 2 Solutions

  • Lightning Network (Bitcoin)
  • Optimistic Rollups (Ethereum)
  • ZK-Rollups (Ethereum)
  • Sidechains

Alternative Blockchains

  • Solana: Parallel processing
  • Avalanche: Subnet architecture
  • Polygon: Ethereum sidechain

Why Scalability Matters

For mainstream adoption, crypto needs:

  • Fast transaction confirmations
  • Low, predictable fees
  • Ability to serve millions of users

When trading, consider network congestion and fees on exchanges like Binance and Coinbase.