Scalability on Blockchain: Is There a Solution?

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Scalability on Blockchain: Is There a Solution?

This is one of the biggest challenges facing blockchain and crypto - obstacles that can only be resolved by industry. Without a solution, even CEO of major global exchanges worry that mass adoption will never be achieved.

Scalability is a thorn that has been running for a long time on the side of this young technology, which is still relatively young and has not yet made significant inroads into the world economy. At a basic level, this relates to whether the blockchain network is able to provide the same fast and high-quality experience to all its users - regardless of how many are online at any given time.

Consumers and companies need to know that they can rely on the network whenever they need to use it, and fixing this before the platform operates is very important. In 2018, a PwC survey of 600 executives revealed that as many as 84% ​​of organizations were actively involved with the blockchain - both at the research and development stage, testing technology, or with direct products.

A bad experience at any point of this trip can be a disaster. Companies are licking their wounds after blockchain investments fail to meet the expectations they will be reluctant to test technology again. Consumers who are frustrated by slow transaction speeds will see no incentive to switch from existing tools that have a much bigger footing in the market.

One of the biggest challenges regarding scalability is the difficulty of reaching consensus on how to overcome it. Bitcoin (BTC), the dominant cryptocurrency in the world, has passed this path before. Even in 2017, the network begins to curve under pressure from user requests - and as a result, the cost to send BTC increases unless the user is willing to wait for days for the transaction to be completed.

While one crypto advocate group wants to overcome this problem by increasing the block size limit - increasing scalability on the chain - others believe that expanding the exponential chain is a better approach. This has led to innovations such as the Lightning Network, an additional layer designed to provide faster payments and lower costs. At least in the case of BTC, this seems to be the direction of travel.

Before this additional layer emerged, the Bitcoin network could only handle seven transactions per second (TPS) - but the Lightning Network could theoretically provide an increase of 10,000 TPS, along with lower costs and instant completion. You might think that this would prove to be a silver bullet for the issue of lasting scalability, but the low usage rate actually means that the operating node loses money when the transaction is processed. This has led to claims that BTC is facing an existential crisis, not least because solutions intended to save the day may not be justified.

Where e-commerce comes in

Naturally, seven transactions per second won't cut it for the fast-moving e-commerce sector. In the real world, it's almost like running a cafe that only has five tables, but every day there are 200 customers waiting for seats. Frequently quoted figures from Visa, the payment processing giant, claim that it is capable of processing more than 24,000 transactions per second.

Regardless of the costs traders face when using this company's infrastructure, it's hard to see why many of them will turn away from established systems that have been adopted by customers for something that can handle 3,400 transactions fewer times per second. It was like going from a busy coffee shop with tables to set aside to a kiosk where no one had room to sit.

That is not to say that this problem is fatal - far from it. Some businesses have integrated crypto into their platforms despite scalability issues, and have started accepting digital currencies as a payment method. Motivation to do it varies.

While some people are tempted by the idea of ​​attracting new customers by giving them the opportunity to use assets that are not received elsewhere, others are interested in making transactions completed faster - eliminating sadness, sometimes waiting for days to get funds in their business accounts. Others are just fed up with the nonsense of handling cash, not to mention the costs they have to pay when relying on financial institutions that dominate the market.

A business case for crypto

Crypto-focused companies such as ABBC strive to get ahead of the curve by offering a blockchain platform designed specifically for merchants and their customers, providing an unlimited experience to use digital currencies when shopping online. According to the company, an old network increasing block size or increasing the frequency of block making simply won't cut it - at least because it could lead to new security vulnerabilities and big problems with a fork.

ABBC says it has recognized that the crypto sector needs to offer the same quality - if not better quality - than a fiat channel that allows instant payments to be made. For this purpose, it uses a consensus protocol known as delegated proof of ownership, or DPoS. This method of validating transactions is built on a real-time reputation and voting system, with delegates placed precisely responsible for the acceptance or rejection of network transactions.

The company estimates that it can handle up to 5,000 transactions per second - the capacity it claims "will only increase in time" and will make it "one of the fastest blockchain in the world." This scalability is complemented by a multicurrency digital asset wallet. offering "top-level security" and instant messaging, shopping centers where crypto enthusiasts can access dozens of large brands in one place, and exchanges that produce low transaction costs, high throughput performance, and lots of liquid trading pairs.

Resource: https://cointelegraph.com/news/scalability-on-blockchain-is-there-a-solution