Hello, community. In this post we will tell you about the problem of blockchain scalability.

Advisor to the President of the European Legal Service for Digital Markets and head of the corporate and legal bloc Vladimir Annikov argues that the main troubles of digital money are due to the lack of scalability (the ability of the system to cope with the increase in load). Companies will not switch to the blockchain until it is proved that they can solve problems in the real world.

“So far, there is no way to confirm that the blockchain has such scalability, for this, some large company should switch to it. This is very similar to a vicious circle, from which it will be possible to get out with time, ”Annikov explained.

The second important issue that needs to be resolved quickly is legal uncertainty, the specialist added. Today, most large states have established an intermediate approach to regulating the digital money market and allowed it to exist, limiting the properties of cryptocurrencies — anonymity is excluded, decentralized emission is controlled, professional intermediaries are imposed normatively and so on.

“Both problems complement each other, finding ways out of one greatly exacerbates the second. It may seem that this is a vicious circle, but one only has to pay attention to the real positive dynamics and it will become completely clear that the problem circle will open sooner or later, and the problems themselves once again demonstrate the historical predetermination of the need for an updated international settlement system, ”I am sure specialist.

A forecast in an interview with Bloomberg

Joey Krug, head of Pantera Capital’s investment division, said the next Bitcoin rally will bring the cryptocurrency market capitalization 1,000% higher than current estimates. Such a forecast was voiced in an interview with Bloomberg. The next BTC rally could push coin capitalization above $ 2 trillion. “If you look at the next rally, I think that the crypto market can give out 10x from the current point,” he said. Krug noted that in previous cycles, news that major players of Fidelity Investments and the Intercontinental Exchange (ICE) entered the crypto market, caused speculative investments to grow, and now the market expects concrete actions to initiate a new bull rally.

For this to happen, the network must increase scalability; the current state of development of the blockchain resembles Dial-up times. “If it comes to the Internet, it’s quite simple to say that you just need to make an application, attract users, and then solve scalability problems. However, in the case of Bitcoin, it should be different, because if there is no scalability, there is no way to be a market maker. ”

Lightning and Liquid network must address scalability issues. These technologies have not yet reached prime time, but Krug expects cryptocurrencies to reach the Visa / Mastercard level in a few years. However, this does not mean that the bear market will continue until this point.