Blockchain 101 Episode 61 – What is scalability?

When Bitcoin was first created, Satoshi Nakamoto did not intentionally limit the block size, with the largest block reaching up to 32MB.

At that time, an average block size is around 1 to 2 KB. Some thought that an excessive block size limit is a waste of computing resources and susceptible to DDOS attacks. Therefore, to ensure the security and stability of the Bitcoin network, Satoshi Nakamoto set the block size limit at 1MB. There was only a small number of Bitcoin users then, with small transaction volume, hence no network congestion.

From 2013 till now, Bitcoin’s price has shot up dramatically, with an ever-increasing number of users. Problems such as network congestion and rising transaction fees began to surface.

The Bitcoin community began looking at scaling Bitcoin by updating its underlying code, increasing its capacity to handle transactions.