Bitcoin think tank rejects paper on ‘limited adoption problem’ science.
A team of researchers from the Bitcoin Policy Institute, a non-profit think tank, have strongly disagreed with the findings presented in a 2022 research paper that claims that Bitcoin has an inherent scaling issue that will limit its adoption in the future.
The original paper, named “Bitcoin’s Limited Adoption Problem,” is based on three flawed assumptions, according to the researchers at the Bitcoin Policy Institute.
Firstly, the authors of the original paper assert that payments on the Bitcoin (BTC) network necessitate the full consensus of the network for settlement. Secondly, they claim that the addition of miners to the network prolongs the time needed for settlement by “delaying network consensus.” Thirdly, they suggest that there is an upper limit on Bitcoin payments due to the architecture of Bitcoin’s blockchain.
The researchers at the Bitcoin Policy Institute dispute each of these assumptions in a recently published paper that cheekily questions whether “Bitcoin works in practice, but does it work in theory?”
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The researchers at the institute, who come from six different prestigious universities in the United States, argue that the so-called “limited adoption problem” is theoretical and counterintuitive to how Bitcoin actually operates:
“Hinzen, John, and Salah argue that the design of the Bitcoin protocol results in a negative network effect. […] This is an interesting theoretical result, but rests on faulty assumptions about how bitcoin actually works.”
The institute researchers refute the assertions made in the original paper, arguing that the authors “fundamentally misunderstand how Bitcoin achieves consensus and how the entry and exit of miners affects the timing of new transaction blocks” and that their research ignores “existing, widely-implemented scaling solutions.”
While the institute’s research paper does concede that the work being criticized comes to a valid conclusion — namely, that “Bitcoin’s blockchain does not scale well for on-chain payments” — it also points out that these scaling issues have been known since Bitcoin’s inception and have, therefore, been adequately addressed since then.
Ultimately, the researchers at the institute observe that the authors of the original paper are “tilting at windmills” because Bitcoin “scales through off-chain payments, not by increasing throughput at the base layer. Off-chain protocols afford more scalability precisely because they do not require consensus of the entire network.”
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