Why does Bitcoin Scale (Why is Bitcoin Surging)?

Why does Bitcoin scale? Editor’s note: This article is from Orange Book (ID: chengpishu) and is authorized to be reproduced by Odaily Star Daily.

As the Bitcoin network continues to develop, more and more people are starting to recognize the importance of blockchain and why scaling is necessary. So what is scaling? What is Bitcoin all about? What are its advantages? Let’s take a look together.

1. How to solve the issue of Bitcoin’s block size? Currently, most cryptocurrencies are mined mainly by “miners”, which also incurs costs for transactions. In order to make Bitcoin more scalable and decentralized, Bitcoin needs to increase its computing power to operate, which is the inevitable trend of Bitcoin’s development.2. Why is scaling necessary? Bitcoin’s scaling was discussed on December 15, 2018, in a blog post stating that Bitcoin can be widely adopted because people are very optimistic about its future prospects. However, there are also other reasons that make it challenging to implement a scaling solution: – First, Bitcoin itself has a large capacity, so its scale can be infinitely expanded. – Second, Ethereum already has a large supply, and this demand is still growing. Therefore, in the long run, Bitcoin’s price should not remain as high as it is now. However, if these assets are to be introduced into its own ecosystem, it needs to further reduce the difficulty through sharding technology.3. In order to make Bitcoin more user-friendly with a better user experience, many people have proposed scaling solutions, such as the Lightning Network. However, recently, there has been an improved version of the Lightning Network protocol called StarNet. Although this upgrade did not bring any change to the entire Bitcoin community, it gave users who want to participate in this project a new freedom of choice: to continue waiting. Why does Bitcoin need to scale? Bitcoin is a peer-to-peer electronic cash protocol based on state channel technology. Its goal is not only to provide a payment gateway services but to create a digital wallet for everyone, storing various things (even more than one) and running on this platform, making Bitcoin an open network.4. What are the benefits of scaling? Besides scaling, there are many other aspects worth paying attention to, such as security, interoperability, and privacy. – For example, one of the most significant advantages of Bitcoin is its support for fast sending and receiving of payments. – Additionally, Bitcoin’s second-layer solutions also provide powerful features, such as allowing smart contracts to automatically execute transactions or call external functions, while also enabling developers to easily build applications or tools.5. Because of Bitcoin’s low throughput, it cannot support a large amount of computational power. By increasing TPS to reach millions of transactions per second, it brings higher performance.6. As an open-source software system, Bitcoin…

Why is Bitcoin surging?

Bitcoin has risen 30% in the past 24 hours. From January 6th to 12th, the price fluctuated between $11,400 and $12,000. During January 9th to 10th, the price of BTC increased by more than 70% (around $1,000). Since March this year, the price has reached nearly $20,000, but there hasn’t been a significant drop or sell-off as last year. (Data Source: Tradingview) If the 2017 ICO frenzy caused investors to sell off due to the low market sentiment at that time, the current Bitcoin bull market is driven by institutional entry. Why does this situation occur? It’s because Bitcoin is widely regarded as a speculative tool rather than an investment tool. Since 2020, Bitcoin has experienced several halving events, including the impact caused by global monetary easing and the continuous decline of the US stock market. Although Bitcoin is still relatively young, its growth rate is much higher than previous quarters, and it has experienced a significant surge compared to other major assets. Bitcoin, as a digital gold, is gradually becoming a value store and payment medium in traditional financial markets. The bear market of 2018 confused many investors, who worried that they had missed out on the future. However, with the increasing popularity of blockchain technology, more and more funds are entering the industry and being invested in production. Therefore, it can be affirmed that the rise of cryptocurrencies has brought great convenience to people.

At the beginning of 2020, the Ethereum 2.0 upgrade will be officially launched, and ETH 2.0 will be released soon, which undoubtedly boosts the development of DeFi. At the same time, there are many new opportunities to use it in the DeFi field. For example, the total value locked on the decentralized exchange Uniswap has exceeded $10 billion and has become one of the most popular applications. In addition, the issuance of stablecoins on the Ethereum chain reached a record high of $12 billion in just the first quarter. Meanwhile, the stablecoin USDC keeps increasing its supply.

Although these positive news stimulates the increasing demand for stablecoins, the trend is still highly uncertain in the current Bitcoin market environment. According to the latest data, by the end of 2018, more than 60% of the stablecoin supply came from Bitcoin, USDT, and other tokens, accounting for about 20% of the total circulation. In the past 30 days, the proportion of stablecoin supply has been expanding. On the other hand, the trading share of USDT is increasing and has reached its highest level in history. In fact, USDT almost doubled its market share in the third quarter of 2019, and its holders have been accumulating since the beginning of 2020. However, considering the recent market volatility, some people expect that stablecoins may continue to maintain a strong momentum. For example, after Tether added 400 million USDT on the TRON network…