The advent of crypto currencies has generated an ever growing demand for growth and development of blockchain technology. This is because the technology behind it is ten years old and as is, it’s hopelessy unable to expand to accommade the potential millions of transactions that will be required in the future.
The problem lies in a design feature that limits the data storage size of the blocks in the chain. This limitation is designed to make for small data files of only One MB to make for faster transit time, but also to prevent a network overload.
Bitcoin was designed to facilitate Peer-to-peer transactions between individuals in the form of currency transfer. Therefore, the data files were expected to be small. But the design flexibility of the blockchain lends itself to a myriad of financial, medical, legal, industrial, and many other applications, putting an unsustainable demand on the system.
Also, the small size of the blocks would prevent hacking attacks like DDOS (distributed denial of service), or ‘Sybil”, which are designed to overload a network.
Solutions to the scalability problem of the blockchain are presented through upgrades like SegWit (Segregated Wintess) protocol, or by using Graphene (Bloom and IBLT filters). But those are only improvements that increase the size to 2 or 8 MB; still too small for real world applications.