Being a successful graduate of Belarusian State Economic University (BSEU), Maria has acquired competencies in economic and social studies. Given Maria’s previous research working experience, and desire to explore what's really shaping the future, the main research focus is placed on FinTech and Blockchain Technology.
Blockchains are here to stay, that is a reality without contestation. The question is how they are here to stay because the problems associated with them seem to be staying too.
One of the biggest issues of all is the issue of scalability. Hand in hand with scalability comes the omnipresent problem of transaction speeds. Trailing the speed and scalability problems is the issue of costs that inevitably arise with the drop in speeds.
The trio of problems are inextricably linked in the blockchain world, for that is the nature of the technology. What was once a newfangled invention that dared challenge the likes of Visa and MasterCard is now a cumbersome leviathan that cannot seem to shake off the tethers keeping it from developing its full potential. But there are some who are ready and eager to provide solutions capable of breaking those fetters off.
Scalability is the biggest problem of the blockchain. It is a technical issue inherent to the nature of the blockchain. Every transaction adds another block to the history of all transactions and every block carries the full history of all transactions with it, thus increasing the data size. With more users joining the network and more transactions being carried out, the result is a snowball effect of histories that threatens to one day simply buckle the whole system under its own weight.
As the histories of transactions grow, the block sizes have to grow with them to accommodate the data. Limits will be meaningless over time, as increasing them indefinitely is not a solution. The result of the increase in the size of blocks is the slowing of blockchain response times and speeds.
Adding more nodes to a network is the only solution to dealing with the increase in data. The nodes will not be working for free, hence the transaction costs will increase to pay for all operating nodes. The fees will also grow if users create backlogs in peak times or want to have their transactions carried out faster.
No matter how we twist and turn it, scalability is vital to the development of the blockchain industry, because refraining from the current system of full transaction history transfers with every block would mean abandoning the principle of immutability and full transparency that blockchain is built on. But with the increase in the number of users and data, the only way to keep moving forward towards mass adoption is increasing the size of the network and scaling it.
The supply chain industry is one of the first that was affected by a cascade of failures associated with blockchain scalability problems. The phantom of failure has also hovered over private blockchains for the same reasons. But despite the multiple attempts at blockchain integration and failures associated with bandwidths and scaling, some solutions have emerged that are offering a means of bypassing the dilemma of scalability and the associated issues.
Qtum is one of the forerunners to offering a viable solution. Qtum is a combination of Ethereum’s smart contract functionality and Bitcoin’s security built on a UTXO-based smart contract system with the use of a Proof-of-Stake (PoS) consensus model. Qtum functions on the Bitcoin core code, which itself uses UTXO principles. Qtum basically works on an Ethereum Virtual Machine using account-based model.
Communication in the network is achieved through an Account Abstraction Layer (AAL) that conceals the identities of the transacting parties. Qtum aims to develop a layer for smart-contract specifications for better security as compared to Ethereum’s similar offering.
Another solution is Credits, which enjoys high network capacity of up to 1 million transactions per second, transaction processing times of around 0.1 seconds per transaction, and low fees starting from 0.001 USD. These features allow the project to serve as a mediator between users and businesses.
The Credits system is a classic blockchain with the traditional concept of data storage and provision of data via a block structure and subsequent building of a fully validated chain of blocks with the ability to explore stored transactions. P2P connections make it possible to achieve high connection speeds and avoid multilayer processing and storage of data on various transmitting nodes. The UDP protocol is used to increase the speed of data transmission within the network.
For this reason, Credits provides for confirmations for the UDP protocol that allowed increasing the volume and speed of data transmission due to parallel processes of sending and receiving confirmations, as well as achieving low CPU usage and reducing response times between the network nodes.
Devvio is another forerunner in the solutions department. Devvio is a blockchain and protocol built on its own consensus algorithm named Proof-of-Validation. Devvio promises to reach fair governance, high scalability, low volatility, smart contract expense optimization, privacy, immediacy (transaction authentication speed), efficient energy use, supply issuances, and protection from fraud/theft/loss.
The project team claims that Devvio allows highly secure and stable payments, which can be made in less than a second. The projected TPS is 8M, which is considerably higher than the TPS in credit card systems.
Komodo is another viable solution, which focuses on providing anonymity through zero-knowledge proofs and security through a novel Delayed Proof-of-Work (dPoW) protocol. The Komodo Platform was forked from Zcash by the SuperNET team and it is the evolution of the BitcoinDark cryptocurrency. Komodo’s Antara Framework is an adaptable framework for simple, end-to-end blockchain development allowing the launch of chains, activate modules, and building blockchain-based applications.
In the Works
Ups and downs are what the path of blockchain to global adoption is made of. There were many failures along the way, but the solutions are slowly coming to light. The scalability problem is not going away anytime soon either, therefore the need for solutions is becoming all the more critical. The number of users is growing, as is the number of use cases.
That means businesses and governments are simply waiting for the industry to resolve its own issues and offer viable products that will not require extensive tuning after adoption and will not be hasty or ramshackle menageries of various systems cobbled together for the sake of adoption. Perhaps it is Credits or another project that will ultimately come out victorious in the struggle for stable blockchain operations and mass use.