Discussion on the necessity of Bitcoin network expansion

As a decentralized digital currency, Bitcoin has experienced many technological iterations and market fluctuations since its launch in 2009, attracting global attention and investment. With the surge in the number of users and the increasing frequency of transactions, the Bitcoin network faces serious expansion issues. This article will explore in depth why the Bitcoin network needs to expand, analyze the reasons behind it, and propose possible solutions.

The core design concept of Bitcoin is decentralization and security, which makes it slower in transaction confirmation than other payment methods. The Bitcoin network generates a block every ten minutes, and the size of each block is limited to 1MB. This means that when the network is busy, the confirmation time of transactions may be extended, and even cause transaction congestion. Take 2017 as an example. At that time, the price of Bitcoin soared, users poured in, and transaction fees also rose, resulting in many users' transactions not being confirmed for a long time. This situation not only damaged the user experience, but also affected the practicality of Bitcoin as a currency.

To better understand the need to scale the Bitcoin network, we need to consider several key factors.

First, the growth of the user base is an important reason for the expansion of the Bitcoin network. As more and more people begin to accept digital currencies, especially Bitcoin, the burden on the network is also increasing. According to the latest statistics, the number of Bitcoin users has exceeded 100 million, and this number is still growing. With the increase in users, the transaction volume of the network is also increasing. The original 1MB block limit is obviously unable to meet the growing demand. Imagine if the number of residents in a city doubles, but the roads are not expanded, traffic congestion will be inevitable.

Secondly, the high frequency of transactions has led to congestion in the Bitcoin network, further exacerbating the need for expansion. In the Bitcoin network, the peak period of transactions usually occurs when the market fluctuates greatly, such as when prices soar or plummet. At this time, users rush to buy or sell, the transaction volume surges, and the network burden increases. In 2018, as the price of Bitcoin fluctuated, the network transaction fee soared to an average of tens of dollars per transaction, and many users were forced to wait or even give up transactions. This phenomenon not only affected the user's trading experience, but also suppressed the liquidity of Bitcoin.

Furthermore, capacity expansion can enhance Bitcoin's competitiveness. As more and more digital currencies enter the market, users' choices become more diverse. Many emerging blockchain projects attract users by increasing transaction speeds and reducing handling fees. If Bitcoin cannot effectively expand capacity, it may lead to user loss and affect its market position. As the "gold standard" of digital currencies, Bitcoin must continue to adapt to market changes to maintain its leading position.

In addition to the above factors, technological advances have also made it possible for the Bitcoin network to expand. In recent years, many technical solutions such as the Lightning Network have emerged to improve the transaction efficiency and scalability of Bitcoin. The Lightning Network creates off-chain transaction channels, allowing users to conduct fast and low-cost transactions, thereby reducing the burden on the main chain. This innovation not only enhances the practicality of Bitcoin, but also provides new ideas for its expansion.

Bitcoin network expansion is not as simple as just increasing the block size. It involves many aspects such as network security, decentralization, and user trust. If the capacity is expanded excessively, it may lead to the centralization of the network, which in turn affects its security. Therefore, in the process of expansion, it is necessary to find a balance between efficiency and security.

In order to achieve effective expansion, community consensus is crucial. Bitcoin developers, miners, and users need to participate in the expansion discussion and reach a consensus. As Bitcoin's founder Satoshi Nakamoto emphasized, the decentralized nature of Bitcoin allows Bitcoin to avoid single points of failure, and this feature also requires the community to be consistent on the issue of expansion.

In practice, some successful expansion cases are worth learning from. For example, when facing network congestion, Ethereum introduced sharding technology to improve the scalability of the network. Sharding technology divides the network into multiple small parts, so that each part can process transactions independently, thereby improving the overall transaction throughput. This idea provides new inspiration for Bitcoin's expansion.

In the future, the expansion of the Bitcoin network will be an ongoing process. As technology continues to advance, new expansion plans will continue to emerge. The Bitcoin community needs to maintain an open attitude and actively explore diverse expansion plans to meet the growing market demand.

In summarizing the necessity of Bitcoin network expansion, there are several key points worth emphasizing. First, the growth of the user base and the increase in transaction frequency are the main driving forces for expansion. Second, technological innovation provides new possibilities for expansion, but the security and decentralization of the network need to be fully considered during implementation. Finally, community consensus is the basis for achieving effective expansion. Only with the joint efforts of all parties can Bitcoin continue to maintain its leading position in the future digital currency competition.

The future of Bitcoin is full of uncertainty, but it is certain that expansion will be an integral part of its development. In this rapidly changing market, only by constantly adapting and innovating can Bitcoin truly realize its potential as "digital gold" and become a widely accepted payment tool for users around the world. Through continuous technological progress and the joint efforts of the community, the Bitcoin network will be able to meet future challenges and usher in a better tomorrow.

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The Bitcoin network is a blockchain network consisting of nodes around the world. These nodes are interconnected through the Internet and jointly maintain Bitcoin transaction records and security. Bitcoin network expansion refers to the method of improving and upgrading the basic protocol of the Bitcoin network to increase its transaction throughput and processing capacity. In recent years, regarding the question of whether the Bitcoin network needs to be expanded, Bitcoin supporters are divided into radicals who believe that expansion is necessary and conservatives who believe that expansion is not necessary. There are also many novice investors who want to know why the Bitcoin network needs to be expanded? Next, let the editor of the currency circle give you a detailed answer.
 Why does the Bitcoin network need to expand?
The Bitcoin community has been exploring and discussing various expansion plans, such as increasing block size, introducing second-layer solutions (such as the Lightning Network), optimizing consensus algorithms, etc. These expansion plans aim to increase the throughput of the Bitcoin network, reduce transaction confirmation time, and improve the scalability of the network to meet the growing needs of users. Below, the Bitcoin Circle editor will introduce several reasons why the Bitcoin network needs to be expanded:
1. Transaction throughput limit: The size of each block in the Bitcoin network is limited, and the number of transactions that can be accommodated in each block is also limited. This results in the Bitcoin network being able to process only a limited number of transactions per second, thus limiting the transaction throughput of the entire network. With the popularity of Bitcoin and the increase in transaction volume, the network's processing capacity needs to be increased.
2. Extended transaction confirmation time: The average block confirmation time of the Bitcoin network is about 10 minutes. This means that a transaction may need to wait for several blocks before being confirmed, especially when the network is congested. Long confirmation time may not be suitable for some real-time transactions and payment scenarios, so the transaction confirmation time needs to be shortened.
3. Increased transaction fees: As the Bitcoin network becomes more congested and transaction demand increases, transaction fees are likely to increase. Transaction initiators need to pay miner fees to attract miners to verify and package their transactions. When the network is congested, transaction fees may rise, resulting in higher transaction costs.
4. Network scalability issues: The number of full nodes in the Bitcoin network is limited, and full nodes need to store and process all transaction data of the entire blockchain. This places high demands on node resources, limiting the scalability and participation of the network. In order to enable more users to participate in the Bitcoin network, it is necessary to improve the scalability of the network and reduce the resource requirements of the nodes.
 What are the Bitcoin expansion plans?
There are four types of Bitcoin expansion solutions, namely non-upgrade expansion, side chain expansion, upgrade expansion and one-way transfer. The details are as follows:
Non-upgradeable expansion:
Non-upgradeable expansion means that there will be no new inventions or changes to Bitcoin's existing technical system, and only certain specific expansions will be made using Bitcoin's existing features. The technical solutions for non-upgradeable expansions are all decentralized, and the overall consensus of the Bitcoin community is not required for implementation difficulty. However, RGB technology cannot rely on the ledger consensus security of the Bitcoin mainnet, and the scalability of Bitcoin transaction scripts is very limited.
Side chain type:
The sidechain type is to create a separate public chain and connect it to the Bitcoin mainnet through a specific cross-chain technology. This was once the most popular and easiest direction for Bitcoin ecosystem expansion. The main reason is that sidechain projects can generally issue their own tokens, and the issuance of tokens and the increase in market value will attract the attention of the community, thus bringing about a hot market.
Smart contracts can be supported on the side chain, and various decentralized applications such as DeFi can be built. It has strong scalability and is not difficult to implement compared to other solutions. At the same time, the ledger is relatively safe. However, not everyone can run the side chain node, and the ledger consensus depends on the management of certain central institutions. The degree of decentralization is low, which may be the main reason why many attempts at side chain expansion solutions have failed to gain large-scale application.
Upgradeable expansion:
Upgrade expansion means upgrading the technical architecture or technical system of the Bitcoin network, one of which is represented by LayerTwo
The BIP-300/301 protocol proposed by the Labs team. The concept of its expansion method is Drivechain, which essentially uses the Rollup method to expand capacity.
The current approach of Labs is to directly hard fork a PoW blockchain Mainchain with BIP-300/301. When the Bitcoin community reaches consensus and recognizes the Mainchain, the Bitcoin mainnet will be upgraded to BIP300/301.
LayerTwo
Labs' solution can ensure the degree of decentralization of Bitcoin and solve the scalability problem, but its expansion and upgrade requires the unanimous consensus of the Bitcoin community to advance. Judging from the overall atmosphere of the current community, it is extremely difficult to upgrade the Bitcoin mainnet.
One-way transfer type:
Bitcoin bidirectional transfer is a common method for cross-chain and sidechain, while Bitcoin unidirectional transfer expansion solution is currently proposed by Hacash community and Hacash.com team. The principle is to transfer Bitcoin irreversibly to a new chain that is theoretically more decentralized than Bitcoin and has a more mature technical architecture, and then expand the capacity through a multi-layer approach.
The Hacash chain that accepts the one-way transfer of BTC is still a pure PoW consensus mechanism. Everyone can run the full node, and the degree of decentralization and security are not inferior to the original Bitcoin chain. Layer2 and Layer3 based on this solve the expansion problem. Anyone can transfer their BTC to the Hacash main network in one direction. It is up to each Bitcoin holder to decide whether the Bitcoin in their hands needs to be expanded. The implementation difficulty is relatively simple compared to other solutions, and the selectivity is strong.
The above is the detailed answer from the editor of Biquanqun to the question of why the Bitcoin network needs to be expanded. In order to meet the growing transaction demand, increase transaction throughput, reduce transaction fees, increase transaction speed and confirmation time, improve user experience, support more application scenarios, and enhance the scalability and decentralization of the network, the expansion of the Bitcoin network is a necessary way to enable the sustainable development of Bitcoin in the future, which will help enhance the practicality and acceptability of Bitcoin and promote its widespread application around the world, so as to develop into a global digital currency and means of value storage.