It is perhaps the decentralized nature of a shared public ledger that is its greatest attraction to users. The idea that there is no controlling or manipulative body underlying the blockchain may induce a sense of liberty amongst users as well as engendering an increased sense of trust in the system. The hostages to this sense of freedom and trust however are scalability and wide scale adoption.
With scalability a blockchain based ledger would be able to process an increasing number of transactions at a much faster pace perhaps even in real time vastly increasing its mainstream potential. Today Bitcoin completes around 6 transactions per second versus Visa’s 1,700 (ref:). Bitcoin’s slow processing time is due to its reliance on a proof of work(PoW) protocol which is open to any suitably tooled up party. The PoW process is also programmed to become more arduous as processing speeds increase thus its transaction processing rate will not increase.
Without scalability the likelihood of blockchain entering the mainstream is greatly reduced and the chance that it will wither on the vine is correspondingly increased. Currently the time taken to verify blocks before they are added to the blockchain, plus the waiting time to allow them to become embedded by subsequent blocks, means that the scope for everyday uses for the blockchain are severely limited. Therefore, the problem of scalability cannot be disregarded or kicked into the long grass.
Differing solutions to the scalability problem are being suggested, investigated, and developed. One possible solution to reduce the block verification time down to enable scaling up could be the introduction of a centralized verification node pool. However, any centralized body, no matter how neutral it tries to be, will always be a slave to its own financial and/or political imperatives. And even if it managed to be neutral it may be perceived otherwise either case undermining trust in the system. Therefore, any centralization of the verification process must strive to maintain transparency of non-manipulation, and impartiality.
That said, a centralized verification pool that is not linked to any external body or interest but is made up from stakeholders in the blockchain (in the case of a business – its customers/clients) may be acceptable to the blockchain’s users as it would facilitate faster transaction speeds and encourage uptake of the good/services being offered. An example of this would be the contents of an airline’s website which, whilst controlled by the airline, is already trusted by its users.
Currently, blockchains which are based on proof of work consensus protocols may be able to decrease latency and improve scalability by a process known as parallel processing, or sharding. Sharding is a partitioning technique used to split a blockchain into small partitions (new blockchains) which all have the same origin block, and which were all verified and trusted at the point of sharding. The newly sharded blockchains can continue to grow independently of each other. The advantage is that each blockchain can grow at least at the same rate as the original blockchain meaning that a significant reduction in latency is achieved. Additionally, as what was once a single blockchain can now grow as multiple chains, the further issue of becoming bloated with data is nicely diluted and deferred. Sharding alone is not scalability’s panacea however, it comes with its own problems particularly questions around security which still await answers. Also, the level of sophistication needed to program in this manner does in itself present a real barrier to blockchain’s transition to the mainstream.
Major cryptocurrency networks Bitcoin and Ethereum both currently function with consensus protocols based on proof of work. As these cryptocurrencies have become more successful the number of transactions needing to be recorded and stored on the blockchain have increased accordingly. The bedfellow that accompanies increased transactions is increased latency as evidenced by Bitcoin’s network which is now widely reported to have in excess of 83,000 nodes dispersed around the globe. Therefore, it appears that with present day technology any blockchain reliant on proof of work seems doomed to life in the slow lane if they wish to remain decentralized.
Whilst proof of work based protocols appear to be heading for the buffers, consensus protocols based on Proof of Stake (PoS) appear to be stepping up to the plate. Advocates for proof of stake claim it to be a gamechanger in respect of reducing latency. Ethereum, which is currently operating a proof of work protocol is planning to shard, and switch to a proof of stake based consensus protocol. Ethereum claims it will reduce energy consumption by 99% from current levels and be able to complete 100,000 transactions per second.
Another blockchain platform/cryptocurrency, Cardano, claim that their proof of stake based platform will handle an eye watering 1,000,000 transactions per second. Both of these businesses will be using proof of stake validation protocols which they say will enable them to operate at these very fast rates whilst remaining decentralized, and permissionless. However, access to this developing technology will for the foreseeable future likely remain limited to deep pocketed National Government organisations, and rich global businesses.
For a Developer seeking to transition to Blockchain based projects the obvious next step will be to assist their clients by developing private, permissioned blockchain projects. These blockchains will give the client business’ the comfort of maintaining total control of the content, secure incremental transition from legacy systems to Blockchain, and the full benefit of the added levels of security blockchain provides. Chainlify’s free to use platform with its embedded suite of tools, end host agnosticism, and resource marketplace will provide developers with a speedy and low-cost transition to blockchain. The Chainlify platform will also enable developers to interact with other developers and provide a space in which code products can be traded.
Throughout history humankind has managed to develop and shape its technologies to achieve its goals. At Chainlify we believe that if a scalable, permissionless, transparent, and secure blockchain based world is the goal that it will prove to be achievable. Chainlify will just enable it to happen sooner.