This article is syndicated from the Monetas blog with the approval of the author, Justus Ranvier.
As a company with current and planned blockchain-synergistic products, Monetas is strongly invested in Bitcoin wallet development. After choosing btcwallet from Conformal Systems as our technical foundation for blockchain integration, Monetas is currently devoting four full-time software engineers to adding features and improvements to btcwallet.
One of those features is colored coin support. This article will explain colored coins, and how we are implementing them in btcwallet, and what capabilities these changes entail for both Monetas and Conformal.
Over the past 4 months we have had 2 interns, Javed Khan and Michalis Kargakis, work on creating a system for simulating high transaction volumes with Bitcoin called btcsim. Since there has been and is currently a great deal of attention being paid to the issues surrounding mining incentives and block propagation, we figured that it would be interesting to investigate the less-discussed topic of high transaction volumes. There are a variety of claims about how the Bitcoin network will behave at transaction volumes approaching those of major credit card companies, e.g. 3,000 transactions per second (“tps”), so we used btcsim to put btcd and btcwallet to the test. After simulating the creation of blocks up to 32 MB in size, we have arrived at some interesting conclusions:
- a 32 MB block, when filled with simple P2PKH transactions, can hold approximately 167,000 transactions, which, assuming a block is mined every 10 minutes, translates to approximately 270 tps
- a single machine acting as a full node takes approximately 10 minutes to verify and process a 32 MB block, meaning that a 32 MB block size is near the maximum one could expect to handle with 1 machine acting as a full node
- a CPU profile of the time spent processing a 32 MB block by a full node is dominated by ECDSA signature verification, meaning that with the current infrastructure and computer hardware, scaling above 300 tps would require a clustered full node where ECDSA signature checking is load balanced across multiple machines.
While the current mainnet rate of transactions (0.9 tps) are much lower than those tested using btcsim, this paints a relatively rosy picture for Bitcoin should the block size be allowed to increase.