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A big hit on Bitcoin is that its core technology is too slow to be a useful master book of the real world. And while developers are fiddling with a variety of fixes – Bitcoin and other decentralized blockchain protocols – they still have to solve the speed problem.
That's why a new ambitious protocol called Conflux is intriguing. The project, which raised $ 35 million from Sequoia China and Chinese Internet companies, claims to overcome a key limitation of the existing blockchain technology.
This limitation is rooted in the fact that protocols like Bitcoin can only add one block at a time to the block chain that acts as a register of the recording (that is, the blockchain). Adding more than one block at the same time is equivalent to a fork, creating two competing chains.
Conflux, however, claims to have passed it with a system that allows parts to work simultaneously on blocks and add them to the chain. In this way, the protocol also preserves the decentralized consensus method that prevents any entity from controlling the blockchain.
The breakthrough proclaimed was led by some important names, including Andrew Yao, a recipient of the Turing award, known as "godfather of Chinese computer science". Another co-founder is Fan Long, a professor from the University of Toronto who has described Conflux as Fortuna.
"The main idea of Conflux is how to make the whole scalable blockchain," he said. "We have modified the structure of the blockchain so that it is no longer a chain in the sense that it records each block based on what the main block says."
Long added that Conflux will serve the promise of Ethereum, which allows users to create and run "smart contracts" on a distributed ledger blockchain. While Ethereum is a proven and powerful technology, it has been hampered by the same speed and downsizing problems that have plagued Bitcoin.
While the so-called private blockchains have overcome these problems of scale, they are able to do so by relying on a central authority, something that is anathema for those who favor the decentralized Creed of Bitcoin. Conflux, however, claims to offer the best of both worlds, namely speed and decentralization. The company describes the technical characteristics in a press release:
"Contrary to popular belief, true decentralization is not sacrificed to increase speed, highlighting Conflux as the first example that reaches the best of both worlds by interweaving a data structure of the Acylic chart directed into the consent algorithm Proof of Conflux's work, tests on its testnet reached a throughput of at least 6,500 transactions per second (TPS), while supporting at least 20,000 nodes, "said the statement.
Conflux also states that Chinese Internet giants are supporting the new protocol by creating "decentralized applications" managed on the company's network. Long has recognized that such applications, known as Dapps, have gained very little traction in the real world, but have attributed it to the scalability problems that Conflux claims to overcome.
As a result, states Long, the smart contracts will outpace their current uses, namely gambling and "initial coin offerings", and will become a force in the financial and insurance sectors.
All of this, of course, is a very high order, especially at a time of growing skepticism about blockchain technology. At the same time, Conflux faces the competition not only from Ethereum, but from others that define themselves as a new generation blockchain; these include Dfinity in the United States, which recently raised $ 102 million and a Chinese company, Xunlei Technology, whose CEO states that the company's "Thunder Chain" can process one million transactions per second.
On the other hand, Conflux has the support of influential investors, which also include IMO Ventures, FreesFund, Rong 360, Shunwei Capital, F2Pool and Huobi. A source close to Conflux told Fortuna the project is also supported by an important Chinese research company.
The demonstration that Conflux is able to provide will come next year. According to Long, the company will release its test network by the end of February and the main network by the third quarter of next year.
