5.3 Limitations and Challenges of Bitcoin Flashcards
Transaction Throughput
The current technology and protocol introduce a theoretical maximum transaction throughput determined by three factors:
After the SegWit soft fork, the raw byte size of a Bitcoin block can exceed 1MB as … (bytes) but by weight units (WU).
While non-SegWit transactions still take up the same space, SegWit transactions save up weight units as …, which weighs less than the ..
block time, max block size/weight, transaction size
blocks are not limited by size
signature data is placed into the witness component;
rest of the transaction parts.
Energy Consumption of Bitcoin’s Proof-of-Work
Difficulties:
§ Miners do not … and the…
§ We calculate with the hash rate and the …
disclose their energy consumption;
hardware used by them
most efficient mining hardware
§ Energy consumption is one of the main issues of Bitcoin. Critics call it an energy guzzler, while supporters praise it for being …
§ The amount of energy that is consumed with Proof-of-Work cannot be underestimated, however, it is also not a reason to …
less energy- intensive than the present global economy
demonize the system when there is no better solution with the same properties.
Major takeaways:
Discussion is still ongoing
§ Many different approaches: Similar results-> …
§ Energy consumption alone not conclusive: …
§ Other cryptocurrencies (besides Bitcoin) with Proof-of-Work …
Bitcoin energy consumption is a problem
CO2-emissions are relevant for climate change
contribute further to the problem
Bitcoin’s Challenges
§ Bitcoin Script is …: Ethereum and other solutions provide a …
§ Bitcoin …: Layer-2 solutions like Lightning Network2 enable … with lower fees.
Bitcoin is …: Stable coins either …(Tether) or by collateral3 (Dai) provide more …
Regulations:
On one hand: over-regulations of cryptocurrencies in United States. On the other hand: little or no regulation in many other countries
limited in its expressive power; Turing complete Smart Contract language
does not scale / is too slow; higher transaction throughput
too volatile; pegged by fiat currencies; stable prices.
