In my last post, I alluded to the fact that blockchain (specifically, public blockchains such as Bitcoin and Ethereum) has capacity issues. This is not surprising, since a public blockchain records every single transaction since its inception. While it has a relatively small number of users and volumes are low, ever-increasing computing power is more than capable of accommodating the rising block size. But if the likes of Bitcoin were ever to become mainstream, handling the number of transactions that (for example) Visa handles every day, either performance would be degraded so much that people would abandon it, or it would become prohibitively expensive. Recording every single transaction on the blockchain is simply not efficient.

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