Bitcoin developers haven't quite cottoned onto the wisdom of separating these functions architecturally.
I'm not sure this is true. Any off blockchain transaction is basically an unsettled (and therefore reversible) bitcoin transaction. So for example, trades on bitcoin exchanges and payments between web wallets will have separate and distinct settlement phases. Generally bitcoin enthusiasts gloss over this though, because they don't like the idea of reversible transactions.
The current maximum transaction rate for the bitcoin networks is something like seven transactions per second. So either they'll have to figure out how to increase that or move to a more conventional clearing and settlement system if bitcoin-as-a-payment-network ever takes off in real size.
> The current maximum transaction rate for the bitcoin networks is something like seven transactions per second
What? I'm not entirely sure that I understand this correctly: Do you say that the whole bitcoin network, with all that computing power, can't compute more than 7 transactions per second?
The limit here is one of design: each block is currently limited to X MB, each transaction takes Y bytes, and each block is designed to happen every Z minutes; for Bitcoin's current values of 1MB (expected to be raised at some point if the size becomes a limit), something like 1k, and 10 minutes, that works out to 7 transactions per second.
Altcoins which have chosen blocktimes of say 1 minute will be able to do more transactions per second, and ones which lift the 1MB cap likewise.
They can compute more than 7 transactions per second, but it is at present a hardcoded artificial limit (one of many) because if the network tried to sustain e.g. 100 TPS like an actual bank, the block chain would balloon in size to terabytes very quickly, and since every Bitcoin client needs every transaction in history, that would force most people to abandon it.
> Today the Bitcoin network is restricted to a sustained rate of 7 tps by some artificial limits. These were put in place to stop people from ballooning the size of the block chain before the network and community was ready for it. Once those limits are lifted, the maximum transaction rate will go up significantly.
I don't know the details, but I think this arises from the rate at which blocks are discovered and the amount of space each transaction takes within a block. 7 tps is actually pretty high. All of paypal only does about 100 tps.
I'm not sure this is true. Any off blockchain transaction is basically an unsettled (and therefore reversible) bitcoin transaction. So for example, trades on bitcoin exchanges and payments between web wallets will have separate and distinct settlement phases. Generally bitcoin enthusiasts gloss over this though, because they don't like the idea of reversible transactions.
The current maximum transaction rate for the bitcoin networks is something like seven transactions per second. So either they'll have to figure out how to increase that or move to a more conventional clearing and settlement system if bitcoin-as-a-payment-network ever takes off in real size.