According to Joi Ito, director of the MIT Media Lab, “those who don’t understand the architecture or the nature of what is going on inside of Bitcoin” is no longer acceptable. “If you try to build ‘something like Bitcoin but better!’ it will probably turn out insecure, underwhelming, and will go against the the fundamental principles that give Bitcoin the potential to be as impactful to banking, law and society as the Internet has been to media, communication, and commerce,” Ito adds. So, how can Bitcoin networks scale to handle handle transactions, while at the same time, bringing in new users? The obvious place to start is by improving the entire bitcoin network by taking the following measures.
“Today’s representative blockchain such as Bitcoin takes 10 min or longer to confirm transactions, achieves 7 transactions/sec maximum throughput,” notes a research paper that was conducted by a team from Cornell University, The University of California, Berkeley, ETH Zurich, the National University of Singapore, and the University of Maryland.
“In comparison, a mainstream payment processor such as Visa credit card confirms a transaction within seconds, and processes 2000 transactions/sec on average, with a peak rate of 56,000 transactions/sec.” The researchers have concluded that, in the current design of Bitcoin Core, there is a fundamental conflict between throughput and decentralization.
Author Ari Juels, a cryptographer and professor at the Jacobs Technion-Cornell Institute at Cornell Tech and a director of the Initiative for Crypto-Currencies and Contracts (IC3) added, “We have to think in terms of a fundamental redesign if we’re going to see robust scaling in Bitcoin.”
For example, as mentioned in Bitcoin Magazine, “using a standard Byzantine Fault Tolerant (BFT) replication protocol with a small number of pre-designated trusted entities would permit improved scaling, but decentralization carries a performance cost.”
Make it More Accessible
While obtaining bitcoins is more convenient than it was even just a couple of years ago, bitcoins aren’t as accessible as they should be. For example, you could visit an exchange, but you’ll have to go through a verification process since these platforms must follow ML and KYC regulatory requirements. Besides that, users must be certain that these exchanges are secure since they don’t want to lose any money like the users of Mt Gox.
Another option is to convert your local currency into bitcoins through a Bitcoin ATM. The problem with these machines is that they charge high interest rates and aren’t available in every location. In fact, there are only 1,000 Bitcoin ATMs in the world.
Keep the Network Secure
Over the years the bitcoin network has experienced its fair share of security breaches. For the most part, however, the bitcoin network is extremely secure. But, that doesn’t mean that developers are waiting for the next hack to occur to strengthen the system.
By using blockchain technology, for example, developers are attempting to prevent scams like counterfeiting, double spending, hacking, and theft.
It Needs to Become Less Volatile
One of the primary concerns involving bitcoin and altcoins is how volatile prices are. While the price of bitcoins have been stable as of late, it’s being predicted that price of bitcoins is going to surge again. That’s because of a number factors, such as “an increased acceptance of payments in bitcoin by large enterprises and authorities, rapidly growing interest and investment in the “blockchain” technology that underpins bitcoin transactions, and also more demand from China as its currency weakens, and the economy slows.”
Apps like BitPay have helped reduce volatility by increasing adoption by partnering with companies like Microsoft, TigerDirect, and Warner Bros.
Just as Reddit uses “karma points,” bitcoin networks could employ a similar method where users could earn points for sharing quality or posting comments. ZapChain and the Bitcoin-powered social network Datt are two examples of companies that are attempting this.
Datt, which is looking to improve reddit, was developed by blockchain engineer Ryan X. Charles,explained how Datt works on Medium by stating;
“The way a decentralized reddit works is like this. Each user has an app, the reddit app, which connects to the reddit p2p network. For most users, the app is a normal web app. Each user funds their own app with a small amount of bitcoin. In order to download content, the user pays a very, very small amount of bitcoin to the peers on the network. This incentivizes people to keep the app open so as to keep servicing the other users. Furthermore, when a user upvotes content, that sends a small amount of bitcoin to the author of that content, thus incentivizing the production of good content. If all the content is authenticated, we can be reasonably sure most payments are going to the right people.”
This system not only allows people to keep control of their content, it also compensates them fairly.
While Datt is one way to incentive users, another way to welcome and reward new bitcoin users is rewarding them with bitcoins if they have any extra bandwidth. Joystream is one company that is doing just that. When financial incentives are in place, this opens up the possibility to build a stronger decentralized network.
B2B Cross-Border Payment Service
Sending money from one country to another can be expensive -not to mention timely and open to security concerns. Bitcoin developers have to to continues working on ways for individuals to send funds across borders, fast, cheap, and securely.