Can Blockchain always be as disruptive as the Internet is to the world?

There is a lot of chat about the blockchain, both online and offline and the only question that seems to have sparked in these conversations is if the blockchain will change the world as the Internet over the years & # 90s and the car over the years & # 39; 20!

Many may argue that it has – gave rise to so many projects with so much potential. Its applications are extensive and organizations are now becoming aware of this. Blockchain technology has begun to empower industries with its innumerable advantages and is radically transforming them.

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The blockchain revolution came to light in three sentences. Firstly, Bitcoins have shown the world that this is the digital currency. Secondly, Ethereum showed us how to build decentralized resources, essentially the thousands of altcoins we know. The third phase is what many blockchain companies are trying to do now, bringing the performance of the blockchain to a whole new level: transaction speed, throughput, sharing, etc. The course of traditional industries is changing, including the Internet and others.

Whenever a new technology replaces an old one, it is expected to improve 10 times, both ten times faster and ten times cheaper. Floppy disks, VHS, optical cables demonstrated the 10X equation in their attempt to change the standard.

It all comes down to sharding

It is unlikely that a blockchain offering small multiples of speed improvement will replace a proven system. For example, Visa can execute 7,000-20,000 transactions per second (TPS) and an increase of 10X means that it is necessary to reach 200,000 TPS for any company to renew a legacy blockchain system. There are several blockchains out there that are trying to do it; indeed, many support significant improvement. If we launch a blockchain, we must make sure we are comparable if not faster.

In the application of real life, is it possible to run 200,000 TPS? Let's analyze: Sharding is a process of dividing a global network into parts of a local network. Each local network would then deal with the consent of two thirds so that a particular transaction is verified in the local network and then transmitted to the global network. This is one of the best methods with which blockchain companies are working to increase speed. So the 10X increase compared to current offers is not difficult to achieve.

Since sharding depends largely on node availability, confirmation processes increase by an order of magnitude when node counts are increased. If a blockchain has 21 knots and takes 1 second to confirm, then 210 knots (a ten-fold increase in node numbers) will take more than 10 seconds for verification. Unless a mathematician has demonstrated that there is a better way than the general Byzantine problem, it is safe to assume that every time the nodes are increased, the confirmation time slows down significantly.

Therefore, for the defense of Ethereum, even if Ethereum has a speed of 20 TPS, it is working with many more nodes than other blockchains. A 20 TPS solution with 20,000 knots is better than a 200 TPS solution with only 21 knots.

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Assuming a hypothesis, all the blockchain companies can only make, for example, 1 TPS. If each company interrupts its network in two, all these companies can run 2 TPS (1 TPS for a network). Suppose you need at least 20 nodes each in a local network, so for all companies to get 2 TPS they must have at least 40 nodes. If we want to make a quick transaction in an imaginary city called City of Z, we need many devices to fragment and make the transaction really fast.

Achievement scale

Scalability in a restaurant means how fast you can serve your meals, the faster you can scale, the more business you can have. Therefore, companies like McDonald's devote much effort to reducing the time between order and checkout to serve their customers.

The scalability in blockchain is similar: it depends on the code (how fast the hamburgers can be turned upside down) and also on the nodes (how many cashiers can confirm the order). So whose code is the best? We will know it only if tried. And the knots? The blockchain with the biggest knots will prevail. Ethereum currently has the most knots, but perhaps not for long.

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Construct consensus for blockchain

Consent is a big problem. As we know from the politics of real life, the bigger the crowd, the slower the consensus. If a smaller crowd can decide for the larger crowd, like in a parliament, then consent can be accelerated. But how to choose the wisdom of the smaller crowd?

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A consensus process can not always be in the hands of a select few. Suppose that all the nodes we have in City of Z, we will randomly choose, for example, 1% of nodes: a set of random nodes agrees on the consent of two thirds. Very important, the consensus process must break geographical boundaries. If a blockchain has over 10,000 nodes, they are also in a good position to reach consensus easily and globally as Ethereum.

But there is a problem. Nodes can not collude. An effective way to prevent collusion is to bring nodes from different locations (or through a different stand-alone system when a person executes a tracert / traceroute command). We believe that Ethereum is so far the only blockchain with a real global scope of nodes, the rest is centralized in a local geography that makes the consent less ideal. With a large area of ​​large volumes of knots, it will create speed with true decentralization.

The future of the blockchain is open

Blockchain is an open and decentralized platform. With this in mind, companies are building the infrastructure to serve all public chains. Another hypothetical example is that the mayor of City of Z wants to implement an intelligent ticketing system for the city.

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What the development team needs to do is load the smart contract into the blockchain and get merchants in City of Z to download the smart contract and voila the whole city now has an intelligent ticketing system. Everything and everything should be on the blockchain, maybe even the code for the blockchain.

Every piece of disruptive technology must present a total change in the paradigm, and while the blockchain has shown the doors of that paradigm, ordinary people will need to see a real benefit to alter their entrenched behavior.

Author: Zac Cheah is the CEO of Pundi X, which seeks to stop commercial activities by implementing blockchain-based technologies.

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