In the context of blockchain, scalability refers to the capacity of a network to handle a growing amount of transactions and is a key challenge for many blockchain systems. Scalability issues arise due to the limitations in the number of transactions a blockchain can process within a certain time frame, which can lead to increased transaction fees and slower processing times.
Various solutions have been proposed and implemented to improve blockchain scalability, including Layer 2 solutions like the Lightning Network for Bitcoin and Plasma or rollups for Ethereum, and modifications in the blockchain protocol itself such as sharding.