Let’s explore how Bitcoin payments can scale in the long-term using second layer technologies such as Lightning and Ark.

As a trustless monetary system, Bitcoin has proven to be incredibly reliable. But this reliability comes with costs – most notably scalability. This article tries to explain how we may be finally starting to crack Bitcoin’s scalability problem with a construct called Ark, and why it matters.

Before we continue, it’s helpful to have a basic understanding of how the Bitcoin transaction model work – often referred to as the “UTXO model”, as well as multisignature wallets, to be able to grasp how different scaling concepts such as Lightning or Ark work together with the Bitcoin network.

Some context

Between 2015 and 2017, the Bitcoin community split into camps with fundamentally different ideas about how Bitcoin should scale in the future.

One camp wanted to scale Bitcoin primarily as a payment system, even if that meant sacrificing verifiability and decentralization for end users. The other camp wanted to preserve Bitcoin as a fully verifiable, trustless system, accepting lower throughput and higher on-chain fees while looking for alternative ways to scale payments, using the blockchain as a settlement layer.

This “war” has already been discussed to exhaustion. The former group – often called the big blockers – eventually forked to a new chain with a shared history: Bitcoin Cash. The latter stayed on the original “Bitcoin” chain, made backwards-compatible changes, and pursued a very different scaling strategy: Layer 2, most prominently the Lightning Network.

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