Crypto glossary

Scalability

Definition

Scalability is a blockchain's capacity to handle more users and transactions without fees soaring or running a node becoming too expensive for ordinary users.

Every node on a public blockchain must process every transaction, so capacity is limited by what modest hardware and home connections can handle. When demand exceeds that limit, fees rise and confirmations slow. Scalability is the search for ways to serve far more activity while keeping the network secure and decentralised.

Approaches fall into two broad camps. Scaling the base layer, sometimes called vertical scaling, means bigger or faster blocks, parallel execution or sharding, as networks such as Solana pursue. Scaling in layers moves execution elsewhere: payment channels like Lightning, rollups on Ethereum and sidechains, with the main chain acting as a settlement and data layer.

Each path trades something away. Larger blocks raise the cost of running a node; layer 2s add bridges, sequencers and new trust assumptions; sharding adds complexity. Headline transactions-per-second figures are often measured in ideal conditions, so real sustained throughput and fees under load are better guides.

Example

During a popular token launch, fees on a congested layer 1 jump to several dollars per swap, while the same swap on a rollup costs a few cents because execution happens off the main chain.

Related terms

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