Konstantins Vasilenko gave a talk about current Bitcoin scalability challenges, existing and upcoming solutions, as well as insights about Bitcoin adoption and why it's not yet widely used as a payment instrument.

1. Bitcoin Scaling
and
Future of User Experience using
Cryptocurrencies
1
By Konstantins Vasilenko,
Co-Founder of:

2. Agenda
u Bitcoin Scaling - Existing Challenges, Upcoming Solutions
u Cryptocurrency Usability – Current Challenges
u Security aspects of using and hodling cryptocurrency
u Emerging New Business Cases
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3. Main Assumptions
u Bitcoin – the most popular Blockchain implementation
(Cryptocurrency) project
u Financial Services – the most popular use case for
Blockchain
u Bitcoin – the most popular Cryptocurrency used for
Payments
u Slow commercial Adoption - 30% increase since 2017 in
number of Merchants Accepting Cryptocurrency payments
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4. 4

5. Adoption – Netherlands Case
survey by DNB.nl
u 2% of Online retailers accept crypto
payments
u 63% immediately exchange to fiat
u 16% convert when price is favorable
u reasons given for crypto acceptance
u 42% to attract extra customers
u 23% customers asks for it
u 21% interested in new Technology
u 7% low transaction fees
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u reasons given for Not accepting crypto
u 58% unfamiliarity with cryptos
u 36% lack of consumer demand
u 17% not feeling the need for acceptance
u 16% lack of trust in crypto
u 12% acceptance not being common in their
industry
u 9% safety concerns
u 5% perceived complexity
https://www.dnb.nl/binaries/Working%20Paper%20No.%20585_tcm46-373269.pdf

6. Are you telling me…?
u Conclusion: customers’ demand for crypto
influences the acceptance decision for merchants
u Catch 22: The more people will use crypto the
higher rate of adoption will be.
u But in order to use crypto, there must be places to
spend it and it must be easy!
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7. Bitcoin Network Limit
u Bitcoin Network has a limit of ~7 tx/s, 1MB block size, 6 blocks per hour,
u on average 250k tx per day – normal mode, fee’s ~0.1-0.5$ per TX
u 500tx per day – High Load, fee’s up to 50$ per TX
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8. u SegWit is short for segregated witnesses, presented by the Bitcoin Core team,
Activated via Soft Fork in 2017
u More data is included per block (about 2MB, could be up to 4MB)
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More info: https://blockgeeks.com/guides/what-is-segwit/

9. Bitcoin Cash – 32MB block size?!
u Bitcoin is an open source project, anyone can fork (make a copy)
u Bitcoin Cash forked in 2017, started with 8MB block size, 32MB planned
u Does it solve scalability? There is still a limit, 8M Tx per day
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10. Sidechains – early prototypes
u Sidechains are the idea to take an asset on one blockchain and transport it on
another, without violating the consensus rules.
u Several groups aim to create sidechains to the Bitcoin-Blockchain.
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• Blockstream.com currently
focuses on monetary
applications to overcome
the privacy and scalability
restrictions of Bitcoin
• Rootstock (rsk.co) creates
a highly scalable, Turing-
complete Sidechain for
Bitcoin.

11. Bitcoin Lightning Network
Offchain scaling
u Bitcoin OnChain Network – 7 TX/S, Bitcoin Cash - up to 128
TX/S
u Visa card payment Network – 4’000 TX/S, up to 65’000 TX/S
u Small and everyday transactions Don’t have to be stored on
main Blockchain.
u No Block Confirmations Needed, Instant and Atomic Transactions
u Micropayments – 0.00000001 BTC can be send (1 Satoshi) with 0 Fees
u Offchain Transactions on Decentralized Network – Unlimited TX/S !?
u Can be used in same way as normal Bitcoin Payments
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12. LN –
explorers & stats
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https://bl.ocks.org/tyzbit
https://explorer.acinq.co/
https://1ml.com/statistics

13. Does LN Solve all problems?
u Outstanding Problems
uAdoption by Cryptocurrency Businesses
uUnderstanding by Users
uLN Wallets and Support from other Industry
Players
uStaking of BTC
uneed to keep BTC on LN Open Channel if you want
to benefit from instant transactions and low fees
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14. Usability Challenges
u Why cryptocurrencies are still not used on daily
basis for payments?
u Price Volatility
u Complexity of payments comparing to classical bank
transfers and debit card transactions
u Complexity of Securing storage and taking
responsibility
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15. Is it more complex to Pay with Crypto
than making a Bank Payment?
u There are 100+ of Wallets for Cryptocurrencies
u Mobile
u Desktop
u Web
u Hardware
u Simple payments are Easy,
u Sending Bitcoin is easier than sending SEPA Bank Transfers.
u Paying with bitcoin, is similar to paying with Mobile Phone via NFC
u However, Its still feels safer and easier paying via Online Banking,
Bank Cards or using Cash on the market. 15

16. Why spend Crypto?
u Do really people want to spend their Crypto
assets? Most people invest and HODL
u Seen as good investment or speculation opportunity
u ”I’m Not spending, until price will go the moon”
u Still more of a Cyberpunks thingy
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17. Securing your crypto holdings
u What is more secure, Mobile crypto wallet or
Debit Card?
u Securing crypto funds is more complex, Tech Savvy
uSeed, Private Key, 2Factor, hardware wallet, etc…
u Mistakes are irreversible and unforgivable
u Chargeback or payment reversal in blockchain world?
Never heard of it.
u Lost Private Keys? Farewell Bitcoin…
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18. Inheritance of crypto assets
u What happens if your privacy is limited?
u What happens if your personal assets are
seized by governance?
u What happens if you get into accident?
u How your family and relatives will be able
to access your crypto assets?
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19. Usability – new Business Cases emerging -1
u All in one, simple UI/UX
services (Paybis)
u Buy/Sell Cryptocurrencies
u Wide selection of Payment
Methods
u Individual 24/7 Support
u Excellent User Feedback
u Crypto Wallets (coming soon)
u Debit Card (coming soon)
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20. u Crypto Embassies –
Classical Bank
Experience
combined with
blockchain tech
u Humanized
experience
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Usability – new Business Cases emerging -2
1st Baltic Crypto embassy
In Centre of Riga
- Education & Meetups
- Hardware Wallets
- Merchandise
- Buy/Sell Cryptocurrencies
- Fully Guided Experience
- Legal Advise

21. u Financial institutions are
trying Blockchain tech to
make international and cross
currency payments faster and
cheaper
u As a normal user you would now
see any differences from UX
perspective
u Example by Ripple.com – XRP
cryptocurrency.
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Usability – new Business Cases emerging - 3

22. Usability – new Business Cases emerging - 4
u Crypto Debit Cards – bridge between financial worlds
(crypto and fiat)
u Loans – one can get fiat without selling his
cryptocurrency
u Custodian Services
u Don’t bother about security of crypto assets, similar to
banking experience and cash/assets
u Investment Funds and ETFs
u Accessible for Institutional Traders and Investors, no touching
of crypto, not facing the complexity
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23. WELCOME 2 BLOCKCHAIN
AFTERPARTY 17:00-19:00
Elizabetes Street 22, Riga
made with In Latvia
Facebook: cryptocash.riga
Twitter: @Cryptocash_Riga