As the online world continues its ever-faster evolution it is today facing a growing threat from those seeking to disrupt, hijack, or destroy data systems. High profile ransomware attacks are becoming more frequent. Theft of personal information, banking information, and commercial data are also more frequent.
The flip side of this coin is the ever-increasing cost of protecting against these disruptive threats. As system protections become more sophisticated so do the efforts and level of sophistication of the disrupters.
An obvious solution to this problem is provided by Blockchain Technology. Central to the security aspect of Blockchain is its decentralized nature. However, a significant drawback relating to current blockchain systems is scalability. As we know blockchains rely on the relationship between security, decentralization, and scalability. However, the trade off is that a blockchain that requires a high level of security and decentralization can currently only achieve this at the cost of scalability.
Today when we wish to measure transaction processing efficiency we apply the ‘Visa test’. Visa processes around 1,700 transaction per second. Bitcoin manages around 5 transactions per second, and Etherium 20. The two principal barriers to Scalability are both time related – time to place a transaction in a block, and time to reach consensus. The goal has to be a level of low latency validation that results in a near real time transaction speed.
As discussed above security is paramount, as is decentralization which plays into security, therefore the real challenge we face today is how to achieve scalability but without compromising either of the two underlying requirements. It is known that distributed systems can achieve a level of scalability by balancing loads across multiple machines. It is also known that content delivery networks achieve faster processing speeds by localizing information. Maybe utilizing aspects of these two and combining them in a new operating system will help provide an answer to the scalability issue.
As a new technology blockchain can look around and cherry pick from older technologies and protocols to enhance scalability. A blockchain typically verifies transactions perhaps by using a byzantine fault tolerance algorithm which allows a system to continue working correctly as long as two thirds of the system’s nodes are in agreement. The time issue here is exacerbated by systems with many thousands of nodes (Bitcoin is estimated to have 83,000) which are spread around the globe.
A solution to this would be to have a verification system layer within the blockchain. The verification layer which could contain a greatly reduced number of nodes, all individually protected and autonomous. System software would route all transactions through this small number of trusted verification nodes where it can be expeditiously processed with the resultant block added to the blockchain. For added security a verification layer could comprise of a greater number of nodes than that required to process a transaction allowing software to randomly select a different batch of nodes for each transaction.
While this solution to overcome scalability may not suit truly decentralized cryptocurrency systems it will be of considerable interest to most other lines of business particularly those with large legacy systems. These businesses will be able to achieve the desired level of security whilst maintaining a real time feel to transactions processing.
Blockchain technology is set to revolutionize the way the world transacts its business. It is set to become the dominating technology in the coming years and Chainlify’s free to use blockchain platform will help with the transition. Join us at www.chainlify.io and see what we are doing.