There is no strict technical limit on the number of transactions per block. Due to the rising price, each block is currently worth something like $350k.
The Bitcoin network rules restrict it to a couple thousand transactions per block. Even with that, each on-chain transaction would "only" need to cost $100 or so to replace the block reward. Infeasible for micropayments, perfectly fine for large scale settlements.
Another possible solution would be increasing the block size limit - the mining effort is a per-block cost, the cost of additional transactions is minimal. So small fees + massive transaction volume could work. With a million transactions each block, $0.35 per on-chain transaction is enough to pay for the current security level. More transactions allow for even lower fees. The Bitcoin Cash fork aims for this.
However, all of this is very long term. The halvings happen a bit faster than every 4 years. Let's assume 3.5 years - that means 20 halvings in 70 years. The block reward not drop to 0 until 34 halvings, so this is not a problem we have to deal with in our lifetime. So for the forseeable future, one possible solution is for the Bitcoin price to keep going up, paying for the same or an increasing security level despite the halvings.
A million transactions per block would increase the block size to a Gigabyte or so. That means the blockchain grows at 52TB a year, significantly increasing the cost of maintaining a full node.
But even that is really not fully taking into account how expensive transactions would be.
The current Bitcoin block size and block rate and transaction size limit the network to 7 transactions per second. There are over 7 billion people. Which means that if everyone used Bitcoin, they could get at most 1 transaction every billion seconds. A billion seconds is over 31 years. Bitcoin as it is now is not for the rubes. Layer 1 transactions will, long-term, only be for larger entities. There’d effectively be a hierarchy of who can actually afford to submit transactions on the blockchain, which very much goes against the ethos of the original Satoshi paper.
And even with your million transactions per block, you’re still talking about only one transaction per month or two per person in the world, which is far from microtransactions. The transaction fee would necessarily be a lot more than 35¢, as otherwise more people would use it directly.
So it’s just not feasible to be both scalable and accessible without a huge hierarchy (ie only big players get to do transactions) and high transaction costs. At least not with the current architecture.
> That means the blockchain grows at 52TB a year, significantly increasing the cost of maintaining a full node.
Indeed, bigger blocks increase the cost of running a full node, but anyone who has a need to run a full node is likely processing many transactions each day, i.e. the increased cost of running a node is nothing compared to the transaction costs.
That's what I don't understand about the "oh, but full nodes will be more expensive" argument. Apparently, you can still run a node on a Raspberry Pi with a SSD attached to it, for a hardware cost of ~$200. That's less than the cost of 20 transactions (bitcoinfees.co, 6 blocks fee ~$12 right now). To me, that seems like the tradeoff between cost-to-run-a-node and cost-to-transact-on-chain has been chosen very poorly.
Yes, about 1700 per second. Which is about the average number of Visa transactions when averaged over a whole year but still very small compared to what VisaNet is capable of (about 65,000 transactions per second)
I can’t find examples of number of cash transactions per second globally, but the Eurozone averages 1.2 cash transactions per person per day (and 0.3 card txs/person/day). Give that there are 7.8 billion people in the world, if each makes on average 1.2 cash transactions per day and 0.3 card transactions per day, that’s about 100,000 cash transactions per second and 25,000 card transactions per second.
Cash, of course, is trivially scalable. At current usage rates, VisaNet could handle all card transactions if everyone used cards as much as Europe. Total payments of about 125,000 per second is about 2 orders of magnitude greater than what a Bitcoin with 1000 fold increase in block size could do.
None of these systems is setup for micropayments. And increasing the Blocksize doesn’t change that. Visa or cash still seem far better for the small, casual payments Satoshi imagined Bitcoin would enable.
The Bitcoin network rules restrict it to a couple thousand transactions per block. Even with that, each on-chain transaction would "only" need to cost $100 or so to replace the block reward. Infeasible for micropayments, perfectly fine for large scale settlements.
Another possible solution would be increasing the block size limit - the mining effort is a per-block cost, the cost of additional transactions is minimal. So small fees + massive transaction volume could work. With a million transactions each block, $0.35 per on-chain transaction is enough to pay for the current security level. More transactions allow for even lower fees. The Bitcoin Cash fork aims for this.
However, all of this is very long term. The halvings happen a bit faster than every 4 years. Let's assume 3.5 years - that means 20 halvings in 70 years. The block reward not drop to 0 until 34 halvings, so this is not a problem we have to deal with in our lifetime. So for the forseeable future, one possible solution is for the Bitcoin price to keep going up, paying for the same or an increasing security level despite the halvings.