Types of Scaling Solutions

There are different forms of layered scaling solutions, all with their own individual design choices affecting their properties and capabilities. Different payments aggregators that serve as layered scaling solutions are designed with trade-offs, such as trust vs convenience, that affect consumers in different ways. Usage of Bitcoin’s settlement base layer is growing, both among traditional handshake aggregators and in newer, Bitcoin-specific methods for aggregating handshakes.

The traditional aggregators – companies like PayPal, Square, Visa, and so on – have built secure, high-capacity, centralised payment networks requiring trust and legal recourse. These systems have built their reputations over time, and enlisted large networks of merchants and consumers by offering fiat payments using fiat settlement services. Recently, they have begun adapting and building infrastructure to offer bitcoin payments using bitcoin settlement services.

There are new systems, like Lightning and Liquid, which resemble bitcoin-native systems uniquely designed to help increase commercial transaction scalability. These options have different degrees of value capacity, speed and decentralisation, and require less trust from consumers. However, they are also less-familiar options that have emerged directly from within the bitcoin ecosystem and will require time to become familiar among both merchants and consumers.