When Satoshi Nakamoto first released their vision for a global payments system backed fully by decentralized cryptocurrencies like Bitcoin, the pseudonymous developer would have no doubt been aware that the technology would need to have the capacity to facilitate a significant throughput.
However, a mere 10 years later, and the de-facto blockchain is still only able to handle approximately 7 transactions per second (t/ps) – at best.
Nevertheless, all is not lost in the cryptocurrency payments arena, as there are still a number of blockchain protocols – both new and established, that are able to facilitate significant throughput.
Here we unravel some of the most notable examples.
Why is On-Chain Scalability an Issue?
First and foremost, it is relevant to briefly explore some of the key reasons that blockchain scalability is somewhat hindered. In a nutshell, it boils down to the age-old debate of ‘Security vs Speed vs Decentralization.’
The general consensus within the blockchain community is that by increasing the block size – and thus, increasing the capacity of transactions per second, this subsequently results in a reduction of security and decentralization.
This ongoing debate has been most vocal within the Bitcoin ecosystem. Opponents of increasing the block size not only fear the threats of malicious attacks and instability but centralization, too. As a result of this intransigence, Bitcoin remains slow, sluggish and at times – expensive to use as a means to send and receive funds.
The only compromise that appears to be able to reach a consensus of some sort is the Lightning Network. However, as the proposal takes transactions off-chain, this opens up a fresh debate of its own.
Nevertheless, as per research recently compiled, there are now a number of alternative blockchain networks that able to achieve both scalability and water-tight security safeguards on-chain.
The key driving force to solving the on-chain scalability conundrum is the underlying consensus mechanism. This is why the team at Syscoin – a project launched in 2014 that aims to bring blockchain technology to the world of business and commerce, developed its innovative mechanism – Zero Confirmation Acyclic Graph (Z-DAG).
In a recently facilitated exercise by blockchain testing firm Whiteblock, the patent-pending Z-DAG technology was able to validate 145,542 on-chain t/ps within a controlled-group setting, and up to 60,158 t/ps independently.
As per Syscoin CTO and Z-DAG inventor, Jag Sidhu, “Combining the security of Bitcoin, the functionality of Ethereum, and the speed and scalability of our Z-DAG technology, enterprise-ready blockchain applications are now a reality via the Syscoin Protocol.”
To put these results into perspective, global payment leaders Visa have a reported processing capacity of up to 65,000 t/ps.
You might not have heard of Solana, not least because the blockchain project is a privately funded, venture capital-backed entity. In fact, the firm recently raised $20 million in Series A funding. Nevertheless, with Solana looking to build a “Superfast Blockchain Rebuilt for Scale”, the project claims to be able to facilitate up to 50,000 t/ps.
The transactional capacity claims of Solana go even further, with the project hoping to achieve computational bandwidth “akin to the modern internet.” Moreover, the team also argues that once fully developed, the Solana network will be able to facilitate decentralized versions of Twitter, Facebook, and even NASDAQ – with an apparent “room to spare.”
However, despite having multi-million dollar financial backing of some notable investors, we need to keep in mind that for the time being, we need to take their word for it.
Velas is a Switzerland-based blockchain project that utilizes an innovative consensus mechanism that is supported by the ever-growing capabilities of artificial intuition. Artificial intuition itself is a theoretical offshoot of artificial software that not only aims to facilitate a more efficient block production process but to also make behavioral decisions similarly to human consciousness.
Without getting too technical, it is claimed that the proprietary consensus framework – known as AI-Operated Delegated Proof of Stake (AIDPOS), is able to reach significant transaction volumes without paving the way for reduced security and increased centralization. In fact, the consensus mechanism ensures that the network remains free from the threats of the dreaded 51% or double-spend attacks.
In doing so, this allows AI to meticulously keep the blockchain network safe, while at the same time validating and confirming transactions in the most efficient of manners.
And the numbers? Velas claims that its native blockchain protocol is able to handle up to 30,000 t/ps.
Launched in late 2017, Qtum has very quickly cemented itself as a top 50 cryptocurrency project in terms of market capitalization. The overarching aim of the project is to find the perfect equilibrium between Bitcoin’s stability and security, with that of Ethereum’s smart contract capabilities. When it comes to transactional throughput, the team at Qtum claim to be able to facilitate up to 10,000 t/ps.
While entry to the 5-figure scalability club is impressive, it is important to note that the claims have yet to be tested via third-party auditors. Nevertheless, with the likes of Whiteblock now offering blockchain projects the ability to publicly verify transaction throughput, it would be useful for the team at Qtum to put these claims to the test.
On-Chain Scalability: The Bottom Line?
In summary, while leading blockchain networks such as Bitcoin and Ethereum are looking to solve their scalability woes in the form of off-chain transaction validation, a number of alternative projects have shown that on-chain scalability is still a real option.
Ultimately, projects need to follow the likes of Syscoin by utilizing third-party auditors in proving that capacity levels that run into the tens of thousands of transactions per second are more than just claims.
Which blockchain will fare the best in the battle for on-chain scalability? Let us know your thoughts in the comments below.
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