The growing acceptance of blockchain technology has led to introduction of blockchain-related applications within our everyday life. The growing number of users of blockchain-based systems and the increasing issues with scaling call for the introduction of solid blockchain scalability solutions.
Blockchain has established itself as a major player in modern technology and is attracting a growing curiosity in the study of distributed ledgers. The distributed ledger technology is decentralized.
Distributed ledger tech is designed to facilitate the decentralized management of transactions. Any node can start an operation according to specific guidelines without needing an outside party to oversee the transaction.
Why is blockchain?
Anybody can do mining? Only one block is published at a given time. When the block is published, miners from other areas can check it out, which takes time.
Furthermore, the capacity of each block can also be limited. This poses a problem for the scalability of blockchains.
Bitcoin is created to release each block every ten minutes. Additionally, the size of each block is limited to 1MB. Therefore, if you have more than one transaction, the transactions will have to be delayed by 10 minutes. The more complex the operations are, the more time is required to confirm the transactions.
Despite this issue, miners are attempting to add transactions that have more expensive fees since the limit is not set to the amount one can pay in fees.
This means that they delay transactions that are low in fees because mining companies are those that receive the transition fees.
This is why when transactions occur in large volumes, the user has to pay higher fees to ensure quicker confirmation. It’s also not sensible for cryptocurrencies to charge high costs.
Ethereum, however, has quicker block times. It averages that one block is released every fifteen seconds. It doesn’t have a maximum block size. However, there is a limit to the total transaction fees for each block.
The mining operator can add the number of transactions they want in a block as long that the total fees incurred through these transactions do not exceed the amount of a specific limit.
Keep in mind that Ethereum is a cryptocurrency platform that includes the cryptocurrency Ether (ETH) and a variety of other cryptocurrencies, commonly known as coins or tokens and distributed applications.
Every operation performed by these apps costs money because miners run the computing for the applications. Additionally, these payments are also performed through transactions, thereby adding the volume of transactions one cannot be able to see in Bitcoin.
One can argue that that is proof that work is a problem that has caused blockchain scaling issues.
What is proof of work?
If a block is created using transactions, the miners must use a certain amount of computational power to release the block. This usually involves solving a difficult mathematical problem.
If the miner released an item with the solution, other people could verify the solution. However, verifying the solution is simple and quick. The solution is nothing more than evidence of the work done – since the miner proves that he’s done his work.
The power that will be required to be used is contingent on the computational capability of the computer network.
The proof of work system is a great method of keeping the blockchain Blockchainalth and not decentralized. However, it is an obstacle to processing transactions more quickly.
5 Promising Blockchain Scalability Solutions
State Channels State channel is a scaling option developed through projects such as Lightning Network (for Bitcoin) and Raiden (for Ethereum). The system lets two or more people or entities set up the state channel. It can be described as a channel where they can exchange money as often as they require, and the transactions are not logged for blockchain verification.
Following is a list of the implementations of state channels:
- Lightning for Bitcoin)
- Raiden for Ethereum
- Trinity for Neo
- SpankChain for Ethereum
- Perun for Ethereum
- Counterfactual for Ethereum
- Celer, Blockchain Blockchainachinery for Ethereum
- FunFair for Ethereum
- Liquidity for Ethereum
1: Sidechains
Sidechains are blockchains connected via a two-way peg, allowing electronic assets to be exchanged among them. To transfer tokens or assets across blockchains from one to the next, the user has to send the tokens on one chain and then send them to the address that locks the tokens.
The following is a listing of options for solutions to sidechains:
- Plasma for Ethereum
- Rootstock RSK for Bitcoin Mainnet
- Alpha Elements for Bitcoin Testnet
- POA Network for Ethereum
- Hivemind for Bitcoin
- Loom for Ethereum
- Liquid for bitcoin
- Bitcoin Extended for Bitcoin
- Wimble for Bitcoin
- Bitcoin Codex for Bitcoin re-design of Namecoin
2: Blockchain Interoperability
Blockchains are increasing, but most of them remain in isolation. They don’t communicate with each other. Should they do, they would use the capacity they share. This way, an idle blockchain could take over and process certain transactions on another, which is getting blocked.
In essence, this is the way that interoperability could help in the ability to scale. It is vital to mention that sidechains can be an initial step to more widespread interoperability between blockchains.
Already, protocols are being designed to enable the integration of all the blockchains available into a unified network. The protocols that are being developed for this purpose are Cosmos, Polkadot, and Wanchain.
Interoperability means that users can transfer another asset without weighing the Blockchain Blockchain. It’s similar to bringing email experiences to blockchain technology. We will don’t worry about which technology or protocol the person we’re about to email is using.
This is due to the interoperability. Contrary to what many think, interoperability shouldn’t result in one blockchain Blockchainher blockchains out of service
3: Sharding
Sharding is a term that has been extensively employed for distributed database applications. Although it hasn’t been extensively tested on blockchains, some have proposed that it could be a possible solution for the scalability issue in blockchains.
In the current blockchain architecture, each node on the network has an identical ledger. Through Sharding, the ledger can be split into different sections that are known as “shards.
Then the nodes in the network could be divided into groups, each of which is responsible for maintaining various shards. This means that the entire network is not focused on updating the same transaction.
This may increase capacity substantially. It is vital to note that the entire blockchain to operate under one state. The shards are just sub-states.
The shards contain addresses, balances, and transaction states. The shards will also transmit proofs of transactions which you could call the main chain.
They can also communicate with each other by using a particular protocol, so they don’t create duplicate work for the network. Some examples of projects exploring Sharding as a potential blockchain scaling solution are Prismatic Labs, Drops of Diamond, Pegasus, and Status.
4: Alternative Cryptographic Algorithms
The management of inactive transactions will require some resources for blockchains. In reality, it’s due to transactions that are not used that the ledger can multiply.
For instance, when you look at the Bitcoin blockchain in Bitcoin blockchain, they are referred to as UTXOs They contribute to the higher payload, as well as high costs and, in turn, an enlargement of transactions that can be verified every second.
However, every transaction results from unredeemed outputs of already completed transactions. Therefore, transactions that are not spent are crucial. Additionally, they are essential to time-stamp evidence of existence, storage of data mining, block creation, and mining.
A blockchain that provides payment services is primarily focused on unredeemed transactions. But, finding a way to reduce the amount of data generated by UTXOs can assist in removing any bloat in the blockchain. Blockchain
The constant growth in demand for blockchain-related applications has created some issues with scaling. Increased users and increased transactions could clog the blockchain network, limiting its ability to handle transactions.
A myriad of elements can impact the capacity of blockchain, but the variety of solutions to scale blockchains offer an essential relief.
However, it’s crucial to remember that the majority of the scalability options are still in the early phases of their development. In the future, the efficacy of scalability solutions within practical applications will influence the general acceptance of blockchain technology.
