A reminder that Bitcoin is not a panacea:
- Bitcoin is currently limited in the number of transactions it can process. Today, it can only process up to 1MB of transactions roughly every 10 minutes.
- Owing to this limit, transactions take longer to approve during times of heavy use.
- As all users pay a fee to miners to make transactions, this limitation on space has increased average fee costs.
- Increasing the block size makes network nodes more costly, as node operators must store the entire copy of the blockchain as computer files.
Bitcoin was announced as a way to liberate money in the same way that the internet made information free. To be as free as the internet the platform would have to support billions of transactions per day, as an idea:
- Alipay: 175 million transactions every day
- WeChat: peak of 6 billion transactions per day during 2017 chinese national holiday
- London Stock Exchange: approx 1 million transactions per day
- Bitcoin: 0.3 million transactions per day – approaching saturation hence the debates over Segwit2x and alternatives
The high demand won’t subside soon as it reflects the demand for a freely transferrable currency compounded by a lack of trust in governments and banks, high banking charges for international transactions and increasingly difficult regulations.
However, also comparable to the internet, the governments will want in on the action – and consumers will demand protection. China cracked down on cryptocurrency in September 2017 following some notable scams.