With increasing user numbers, the network must be able to handle a larger number of transactions in order to scale. Transactions on the network are grouped into blocks, with each block having a maximum size of 1 MB. Among Satoshi Nakamoto's rationales for 1 MB block sizes is security; a 1 MB block size prevents DoS attacks. This decision, however, has adversely affected the efficiency with which the network can process transactions. As the user base grows and transaction volumes increase, issues concerning longer transaction times and fees arise, since not all transactions can fit into a 1 MB block, and larger blocks are automatically rejected by the network. Different factions within the Bitcoin community have proposed competing solutions to resolve the scalability issue. A hard fork of Bitcoin, known as Bitcoin Cash, resulted from these divisions.

Bitcoin's scalability issue has been around for years. Since Bitcoin's inception in 2009, the network has experienced congestion and slow transaction times which have gradually increased in severity. At this point, it takes an average of 40 minutes to create a block on the blockchain which is about 10 minutes longer than one second.