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The number of witnesses has indeed been constraint in BitShares 1, but is no longer in BitShares 2. It is yet another shareholder voted parameter that could go from 11 up to 1100 (arbitrary number). The scaling constraints are in fact the time it takes for packages to travel around the world. If you had all the validators in one room, you could easily scale to billions of transactions with block confirmation times of less than 1sec, but a publicly distributed and decentralized network is located around the globe with worst case scenarios of 1-2secs for a roundtrip of packages.
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