Are cryptocurrencies ready to handle large number of transactions?

[James A. Donald]

On 12/26/2017 4:04 PM, Steven Schear wrote:
> Clearly they are not, yet. The problems are somewhat multi-dimensional 
> and the way forward isn't assured. If some counters wanted to scale a 
> "Bitcoin-like" chain to handle, on-chain, the average transaction volume 
> of PayPal (about 120/sec.), quite a coup, it would require (by my 
> reckoning) a block size of about 64 MB. The Bitcoin Unlimited people are 
> planning to test blocks much larger. Clearly, this would likely result 
> in considerable miner concentration, unless, as Garzik's recently 
> announced Bitcoin United (which includes a "our" Escher feature) takes 
> over Bitcoin Corey's mantle.

Every peer has to download every transaction, in order to judge it for 
validity. If relying on someone else's claim about validity, not truly a 
peer.  It is having many peers that makes the network resistant to 
control and attack.

This inherently limits the number of transactions that can be made fully 
on the blockchain and fully peered to something that is not compatible 
with taking over the world.

Thus scalability, up to world conquering scales, requires an 
architecture where most people do not have peer wallets, but client 
wallets, and most transactions are consolidated into fewer and larger 
transactions by important peer wallets functioning somewhat like banks 
before the transactions are entered into the blockchain.

The Lightning Network is intended to have transactions consolidated by 
important peer wallets functioning somewhat like banks, but it is not 
altogether clear how this will work in practice, or if it will work in 
practice.