Long-term Bitcoin Scalability

The interest has grown around Bitcoin as a trustless and decentralized digital payment service. Along with the increase in users and transactions, Bitcoin suffers from challenges regarding scalability. Many solutions have been proposed over the years, but Bitcoin is still struggling with finding the solution that suits everyone. Lightning Network as one of the most promising solutions, will be in the scope of this thesis, along with why such a solution is needed. By investigating Bitcoin, scalability challenges and proposed solutions, we evaluated Bitcoin s future. We explore challenges such as propagation time, block size and energy consumption. Increasing the block size, changing the consensus algorithm and off-chain payments are discussed. The Lightning Network as an off-chain solution is investigated further in-depth. Challenges and consequences of implementing the Lightning Network are discussed. Furthermore, this thesis discusses whether the Lightning Network is the solution Bitcoin needs or not