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Market Analysis Report (20 Jan 2021)

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Despite the growing need for crypto scalability, many digital currencies remain relatively slow due to their technical infrastructure. Indeed, blockchain networks can attain formidable speeds, but this entails dealing with several design challenges.

Often referred to as the blockchain trilemma, the creation of a blockchain network that is concomitantly scalable, decentralized, and secure is proving difficult. Some projects claim to have solved the trilemma, and despite seeming so, haven’t had a chance to undergo actual stress tests under real-life conditions.

There are cryptocurrency industries that demand ongoing support for superior transaction speeds. While hypothetical cryptoassets to transfer real estate ownership don’t need speedy transactions, cryptoasset trading, gambling, and commerce need fast confirmation times.

The cryptoasset trading industry constantly finds itself in dire need of high transaction throughput; in this case, for each and every coin. The reasoning is simple – if a trader is slowed down by lengthy processing times, they’ll miss out on valuable gains.

Nothing screams fast-paced as loudly as online gambling. When gambling with cryptocurrency, many users find themselves depositing and withdrawing multiple times per day, to the point that if a Bitcoin casino processes withdrawal requests instantly, the delay may occur due to the low bandwidth of the coin’s network.

Achieving higher transaction speeds is possible via blockchain upgrade like Ethereum 2.0 and layer-two scaling solutions like the Lightning Network.  Currently, ETH handles about 15 transactions per second and is poised to improve, while BTC handles up to 7 transactions per second.

Transaction acceleration services are sometimes provided by miners to make sure that low-priority transactions are not left behind. Some services are available for free, whereas others may come at a low cost. Results may vary.

Source: https://www.cryptocompare.com/email-updates/daily/2021/jan/20/

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