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   867

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.

SEC to Need More Info on BTC ETF

SEC is gathering more input from the public – to date, according to the agency, more than 1,400 comments have been submitted
21 September 2018   183

The US Securities and Exchange Commission (SEC) announced the beginning of a formal process for considering the application for the creation of bitcoin-ETF from the New York companies VanEck and SolidX. Nevertheless, the agency appealed to the community for more information. This is stated in the document published on the SEC website.

Institution of such proceedings is appropriate at this time in view of the legal and policy issues raised by the proposed rule change. Institution of proceedings does not indicate that the Commission has reached any conclusions with respect to any of the issues involved. Rather, as described below, the Commission seeks and encourages interested persons to provide comments on the proposed rule change.
 

The US Securities and Exchange Commission

At the moment, the SEC received about 1,400 comments.

According to the document, the Chicago Board Options Exchange (CBOE) has signed an agreement on the exchange of data on bitcoin transactions, trading and the state of the market with the cryptocurrency trading platform with Gemini.

The agency asked commentators to clarify the position of Gemini in the digital currency market and assess the likelihood of increased volatility at this site in connection with possible trades of bitcoin-ETF.

So, before September 30, the department had to decide on whether to approve, deny or initiate the proceedings. The SEC chose the latter, which is likely to delay the process until the next year.