Will Bitcoin Cash eventually need a second layer?

Bitcoin Cash proponents do not inherently oppose second-layer scaling solutions like BTC's Lightning Network. However, their main concern lies in BTC's emphasis on second-layer scaling without adequate attention to base-layer scaling solutions. The Bitcoin Cash philosophy prioritizes exhausting technological possibilities at the base layer before considering second-layer payment systems. As many BTC/Lightning Network users have found out, second-layer channels can only work well when the foundation has a high throughput. Research into base-layer scaling for Bitcoin Cash has shown promising results, with successful tests of 256 MB and 1 GB blocks, and the potential for achieving VISA-level capacity in the near future.

In a major effort to address scaling even further, in May of 2024, Bitcoin Cash will activate an adaptive block size limit algorithm. This algorithm will constantly adjust the block size, with a baseline of 32 MB, as the needs of the network evolve. The update will allow the block size on Bitcoin Cash to grow as much as 2x per year.

Bitcoin Cash, under the current rules, could handle all the transactions from BTC, ETH, LTC, and Doge in addition to all the BCH transactions it already does. It would take massive transaction demand to make second-layer payment channels more efficient than base-layer transactions. While Bitcoin Cash currently handles significant transaction volumes efficiently, proponents remain open to second-layer developments if base-layer scaling faces challenges in the future.

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