Blockchain service provider TAAL Distributed Information Technologies Inc. has upgraded its data size to 10MB, marking a significant step forward for transaction processors while also reflecting TAAL’s strategic plan to transition away from block reward subsidies.
The value is in utility
TAAL’s new revenue model is based on the number of transactions that it can process for its clients rather than the number of blocks that it can produce.
“This is the only revenue model that can sustain the infrastructure providers of the blockchain into the next century after coin distributions have reduced to zero,” said TAAL CEO Jerry Chan in a recent interview.
The more utility the Bitcoin blockchain has, the more profitable it should be for transaction processors. As the block reward continually moves toward zero with each halving, processing Bitcoin for the block reward becomes less profitable, and for many small processors, it even becomes unprofitable. As a result, the only way these processors will be able to stay afloat in the future is via the transaction fees attached to each block. If there are more transactions taking place on-chain, then there will be more transaction fees included in a block.
Operating at scale
With block rewards across BSV, BCH, and BTC going to zero, it is important for the network to operate at scale—which only the original Bitcoin (BSV) can do. If the network is limited by a block size restriction like the BTC and BCH blockchains are, there are only so many transactions, and therefore, only so many transaction fees, that can fit into the block.
Having this artificial ceiling on a chain negatively impacts all participants. When a chain has a block size limit, individuals cannot build applications and services that operate at scale, and processors are forced to rely on the block reward to stay profitable.
The Bitcoin SV (BSV) network does not have this problem thanks to the Genesis protocol upgrade in February which eliminated the block size limit. And thanks to TAAL’s innovative work that optimizes the Bitcoin ecosystem for individuals and businesses building on Bitcoin, companies and software developers can regularly scale their platforms.
As time goes on, many transaction processors will point their hash power to the BSV network so that they can earn enough revenue to keep their operations going. Given Binance Pool’s recent interest in processing BSV, it looks like the switch to BSV has already begun.
New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.
