There are L2s that solve this, in exchange for slower inclusion into the main chain. Or you can just trade wrapped BTC on another network. In that case, the Bitcoin main chain functions like a gold depository institution in traditional finance.
instead of immediately sending bitcoin itself you and an network of others basically end up trading signed transactions. when you finally want to settle you send the latest transaction to the network where it is settles on chain.
edit: i should say the final state of the wallets is settled on chain.
Exchanges allow for sub-second resolution of a transaction because the resolution is actually pushing numbers around in the exchange's own internal tables (or between trusted exchanges). Banks offer similar service when trading fiat currency (either because they can resolve an internal account-to-account transaction or because they'll float the risk of fraud until they can resolve a cross-firm transaction). But if you want to have the Bitcoin network agree on a transaction, it has to get buried several blocks deep in the chain, and that takes time.
Luckily Bitcoin has second layer systems being built on top of it, which allow it to leverage that 2-3 on-chain transactions per second to process thousands of millions more transactions off chain either through decentralized systems like Lightning or centralized custodial wallets.
Bitcoiners strike a balance with on-chain and off-chain transactions because Bitcoin has several properties which make it undesirable for many sorts of transactions. A short list would include 20~60+ minutes for transaction capture, lack of a way for merchants to initiate transactions (the dominant method in B2C commerce in the US), user-unfriendliness of much of the ecosystemic software, etc.
Ya, this is one of the things that bugs me most about Bitcoin… And there isn't really any way to “fix” it apart from accepting a transaction after a smaller number of confirmations.
A bitcoin transaction never settles. If a longer chain is created without that transaction it will become the current state and that transaction will be effectively rolled back.
Bitcoin is notoriously slow. I don't think it's a good example of a high-throughput system. There are chains out there with 100x the number of transactions per second than that of Bitcoin. https://realtps.net/
Exactly. I'm writing a (low-frequency) arbitrage program in Clojure for fun, but the long confirmation time for BTC and the inability to move non-BTC currencies between exchanges greatly limits this in practicality.
It might impact a normal user if one chain is seen to be more effective at handling larger load. There were long delays previously in bitcoin that caused transactions to not go through for hours from my understanding.
Bitcoin itself has a laughably low transaction speed, somewhere in the neighborhood of 4/s. The main way around this appears to "trade" crypto in exchanges without most clients ever taking physical possession of their coins via the blockchain itself.
This is why exchanges getting their hot wallets hacked is a big deal, a shocking percentage of crypto "traders" leave their holdings with the exchange.
What do you mean by "especially advantage for the large numbers, since banks cannot do that" ?
Bitcoin requires a validation cycle or two in order to be certain that your transaction is going to be on the main chain, so it's 10-20 minutes.
For traditional infrastructure, the RTGS (real time gross settlement systems) accessible to banks and large customers handle transactions in seconds. If you're in a treasury department of a company who routinely needs to move large amounts around, doing so nearly instantaneously is absolutely a solved problem.
You can aggregate those and pay them out when they become big enough. Bitcoin stores every transaction on every computer on the Bitcoin network. It's not suited to transactions that small, you're just wasting everyone's resources.
Why would someone use an awkward and complicated second layer built on top of 1.5KB/s of transactions that cost $25 ?
Ethereum and bitcoin cash both exceed bitcoin's transaction throughput. Ethereum dwarfs everything else in number of transactions per day.
If everyone in the world uses bitcoin, everyone will get a single on chain transaction every 60 years, even though a single hard drive could store the next 300 years of transactions at this rate.
If your internet connection had the throughput of bitcoin, reddit.com would take 36 minutes to load.
There is no technical reason it has to be this way, bitcoin was crippled just to sell you a second layer while other cryptocurrencies are easily blowing past it in transaction throughput.
That's every coin but Bitcoin. Ethereum, monero, Bitcoin cash, etc are all fast and trivial to send transactions through. Only Bitcoin has problems because it is being artificially strangled.
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