Scalability Blockchain – BTC wires

Of& nbspKapil Gauhar

There is no denying that cryptocurrencies are doing well on the market today. But with more tokens, investors, users, exchanges and startups involved than ever before, scalability is emerging as a serious problem. With the transaction data accumulating every second, the existing system is starting to weigh under its weight.

Transaction limits

With each transaction or purchase, Blockchain adds another block to its transaction chain, and each block rises with the data as it transports the history of previously added blocks. As more and more users join the networks and the transaction history grows, the existing system is in danger of instability.

You can also read: How to make anonymous Bitcoin transactions?

The size of the data

The Bitcoin blocks were originally hard-capped at 1MB or about 2,020 transactions, but there is the potential for an innumerable number of transactions to be made on each coin and then to be recorded on each block.

As the transaction continues and the records increase, the block size increases, eventually exceeding any set limit. Although Bitcoin has improved its limit every block, while Ethereum does not have a maximum limit. Therefore, cryptocurrencies can adapt much better to the scale, but this still presents problems, for example the blocks will continue to increase with use, each transaction will require more time to be processed, etc.

You can also read: Should you invest in Monero?

The response time

Each recordable transaction requires verification of P2P, which can take a long time with the number of blocks involved. Currently, Bitcoin is verifying or creating a block every ten minutes.

As more and more users incur a large number or in transactions, it takes even longer for verification.

Bitcoin can handle around 60 transactions per second, which pales in comparison to the Visa peak rate of 47,000 per second. Because this expands in the same omnipresent role as legal currency, cryptocurrency must process a much larger number of transactions. Because Bitcoin reaches the Visa numbers, it would become similar to exchanging four terabytes of data each year. Despite the lack of Ether blocking limits, it takes about 14 seconds to create a block.

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Cost involved

To handle advanced traffic caused by increasing numbers of users and transactions, multiple nodes are required to process them, which means that running costs are not cheap. In addition, miners show preference for transactions with higher commissions, which means that to get a transaction to be verified in a timely manner between peak times can rise from a fraction of one cent to many dollars, and there is no denying at the top you can climb when resized. Provided that the counter and pros of Ethereum, it is considerably inexpensive compared to that of its main rival, with transaction fees of less than 2% of Bitcoin.

You can also read: Pros and Cons by ZCash

What are the solutions, then?

Hard fork

When a platform drastically moves away from its primary ideals, it is recognized as a rigid fork. Following the hacking of the decentralized autonomous organization (DAO) on the Ethereum network, where $ 53 million of crowdfunded digital currency was stolen, Ethereum took a hard gallows to claim the money and continued as Ethereum, while the current course has maintained the original blockchain as Ethereum.

Classic

Recently Bitcoin has adopted a fixed fork in the size of the block with limit, which means that the old and the new software are not compatible with each other and does not invalidate the old results. Bitcoin has forked reliably in advance, as with Bitcoin Cash, and there are others scheduled for 2018.

Segregated Witness

The proposed Bitcoin forks will include all SegWit, a software designed to initially resolve the malleability of transactions, but which also improves the problem of limited block size.

Increases the block size limit to 4 MB, which means that a single block can hold records of more than 8,000 transactions. However, the increase in the block offers a short-term respite in scalability problems; it will eventually present the same restrictions once the transactions have exceeded the limit.

Lightning network

The Lightning network is a payment protocol that depends on the SegWit platform and the one that introduces instant transactions.

Instead of confirming the transactions through the miners of the cryptocurrency network, which is mainly time-consuming for Bitcoin, the transaction takes place on a separate channel, and the blocks are updated later. The Lightning Network is being tested starting last month, with TorGuard as the first VPN provider to use it.

Distributed Ledger Technology

Developed by the Polish fintech company Billon, which deals with digitized versions of currency rather than cryptocurrency, DLT offers fast transactions at the speed of 130 million every day. This number is comparable to traditional banking giants such as Visa. Billon said his platform is "Faster, highly scalable and more convenient [….] of any alternative approach. "

sharding

The alternative Blockchain platform, Zilliqa, uses sharding which means splitting the block verification process and managing the parallel subcommittees to collect the completed data. Sharding handles 2400 transactions per second and aims to reach the Visa average of 8,000 transactions per second.

More importantly, Zilliqa reacts appropriately to downsizing as its approach increases with its network size, as opposed to Bitcoin which clogs with transactions. With a node size similar to Ethereum, Zilliqa hopes to handle twice the Visa transactions every second.

Plasma

The Ethereum plasma will process unwanted data from the root chain, instead of working from the block header that hashes to verify the transaction, which will minimize the time and power needed to process transactions. It will only show the successful transactions of the public Ethereum blockchain, provided that the Ethereum blockchain is large, for a leaner verification process. Because Plasma is centered around blockchain verification, you can use a two-time process in which the Lightning network processes the transaction and Plasma updates the blockchain.

You can also read: Against and pros of Bitcoin

The future scalability of Blockchain

Since cryptocurrencies are decentralized, various possibilities may be presented because of the platforms, as the user has developed. Political principles affect how much the service can move away from its original ideas, but in the event that cryptocurrency has to integrate and perhaps completely exceed the fiat currency, it must be prepared for the billions of transactions it should support as well as the log, while it is still working on Blockchain Technology.

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Kapil Gauhar

Kapil Gauhar is the founder of Blogger's Gyan. He is a passionate blogger, a great thinker and a creative writer. His passion for making friends with words and making people aware of the wonders of the digital world is what drives him to write as a career.