Microsoft: on-chain scaling fails to meet capacity needs

Microsoft concluded in their year-long research that on-chain scaling is inferior to “layer 2” approach and is collaborating in its development
13 February 2018   419

Recently Microsoft has published the results of their one year long research effort to determine what method of scaling is superior in term of future-proof “millions of tx per second” requirement.

And their view of increasing block size, Bitcoin Cash approach to the problem, is negative. Citing the Microsoft's post, such approach is “degrading decentralization” and wouldn't allow further scaling. Director of Program Management at Microsoft’s Identity Division Alex Simons writes in his report:

“While some blockchain communities have increased on-chain transaction capacity (e.g. blocksize increases), this approach generally degrades the decentralized state of the network and cannot reach the millions of transactions per second the system would generate at world-scale.”

He says, that the only viable solution is implementation of “layer 2” protocols. In layman's terms, layer 2 protocol is centered around multiple sidechains being brought under the main chain to further distribute necessary computations, and only the relevant finished result being uploaded to the main chain. If all this sounds to you awfully similar to Lightning Network protocol, then you are right. Lightning Network is, in fact, the proposed solution to the problem, and Microsoft even announces, that they will collaborate in development of layer 2:

“To overcome these technical barriers, we are collaborating on decentralized Layer 2 protocols that run atop these public blockchains to achieve global scale, while preserving the attributes of a world class DID (decentralized identity) system.”

Considering the great success of Lightning Network, which has already surpassed Bitcoin Cash in node count across the globe, it seems, that Microsoft is on to something really benificial. If all the promised qualities of Lightning are true, soon we'll see tx being completed in seconds, and fees in range of cents.

Mt. Gox Trustee Can Sell 2000 BTC Soon

Possible sale of such a large batch can lead to a further fall of the bitcoin price
26 April 2018   167

Head of the Board of Trustees of MtGox, Nobuaki Kobayashi, is probably preparing to sell a new batch of bitcoins, this time at a rate of 2,000 BTC.

This assumption was made by the bitcoin-investor and the head of the Altana Digital Currency Fund, Alistair Milne. In support of his words, he brought to Twitter a link to the trustee's MtGox address.

Alistair Milne Twitter
Alistair Milne Twitter

Apparently, on the morning of Thursday, April 26, from the address indicated, 2,000 were transferred to another address. Some of the funds that were there before (8,000 BTC) were almost immediately expended.

Possible simultaneous sale of such a large batch can lead to a further drawdown of the bitcoin price.

Bitcoin Price Chart
Bitcoin Price Chart

Trading on Wednesday evening at around $ 9,000, on the night of Thursday, the first crypto currency continued the decline started yesterday, dropping at a certain point to $ 8,650. At the time of publication, however, there has been a slight increase - according to Coinmarketcap, the weighted average bitcoine rate at that time is $ 8 790.