Microsoft has concluded that so-called ‘layer 2’ options are needed for Bitcoin to scale and is “collaborating” on the expertise.

Microsoft: On-Chain Fails To Meet Capacity Needs
In a weblog submit on Monday, Director of Program Management at Microsoft’s Identity Division Alex Simons stated that layer 2 scaling options, which principally contain the Lightning Network, are superior to on-chain scaling.
Simons writes:
While some blockchain communities have elevated on-chain transaction capability (e.g. blocksize will increase), this method usually degrades the decentralized state of the community and can’t attain the hundreds of thousands of transactions per second the system would generate at world-scale.
He later continues:
To overcome these technical limitations, we’re collaborating on decentralized Layer 2 protocols that run atop these public blockchains to realize international scale, whereas preserving the attributes of a world class DID (decentralized id) system.
The submit marks what is probably going Microsoft’s most direct pledge but on the way forward for public blockchains, together with Bitcoin.

After a yr of analysis Microsoft has concluded that on-chain scaling would not work: https://t.co/THeM2ToeFi pic.twitter.com/vRo1USTGza
— INNVTV (@innvtv) February 13, 2018

The pc big’s description of on-chain scaling choices as “degrading decentralization” particularly locations it in opposition to Bitcoin laborious forks providing greater block sizes, particularly Bitcoin Cash.
The fork has lengthy attracted criticism from a few of Bitcoin’s earliest proponents, with pc scientist Nick Szabo calling the community “centralized sock puppetry” final yr.
The assets it is going to now make use of to additional improvement of layer 2 stays unknown.

Lightning Network Passes Bitcoin Cash Node Count
“We are humbled and excited to tackle such an enormous problem, but additionally know it may’t be achieved alone,” Simons continues.
“We are relying on the help and enter of our alliance companions, members of the Decentralized Identity Foundation, and the varied Microsoft ecosystem of designers, coverage makers, enterprise companions, hardware and software program builders.”
The Lightning Network had already made appreciable advances this yr, debuting its first mainnet launch and rising quickly to include virtually 2000 nodes as of February 13 – greater than the Bitcoin Cash community.
The highly-anticipated layer 2 expertise would serve to make Bitcoin transactions price fractions of a US greenback cent and full virtually instantaneously.
What do you concentrate on Microsoft’s appraisal of layer 2 scaling options? Let us know within the feedback beneath!

Images courtesy of Lightning Network Explorer, Pexels
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