Global companies are adopting distributed ledger technology to improve efficiency in areas such as global payments and supply chain transparency. Blockchain technology can gradually replace paper-based transactions and also improve security.

However, many of the platforms in use today are poorly designed. It is very easy to clog the networks with traffic, which creates latency issues and ultimately an unsatisfactory user experience.

According to a 2019 McKinsey report, there are now more than 20 billion connected devices in the world, each “requiring data management, storage and retrieval.” However, the blockchain design is inadequate to handle this huge wave of data, forcing the networks to maintain high speed and sufficient storage capacity.

Provides blockchain stability
Transaction speed is important to blockchain adoption and sustainability. However, performance should be reduced.

There are several factors that can delay confirmation, but the main reason is network congestion. When multiple users submit transactions, there will be longer queues for the nodes to confirm. This is due to the fact that miners or auditors working on the network are checking against the general ledger. While this process reduces risk, it can also sacrifice transaction speed, especially with high traffic volumes.

Developers are also trying to figure out how to store blocks on the network permanently. Large increases in storage requirements can cause the network to become slow and unstable. The protocol must contain participants in order to be able to transfer and download a string in a short time.

The blockchain triad presents a technical challenge between scalability, decentralization, and security. Developers can achieve two of these factors, but the third must be sacrificed.

Immediate confirmation becomes important for adoption because decentralized innovation competes in the marketplace with traditional solutions. In the financial industry, for example, there is an urgent need for high bandwidth, low latency networks that can match the bandwidth of Visa and MasterCard networks, which process tens of thousands of transactions per second.

Meets user expectations
Over the past year, we have witnessed several events that are close to immediate confirmation, closer to reality. Two examples of improvements at the protocol level, such as pooling signatures and proposals to disable pipelines.

Collecting signatures enables auditors to use multiple Boneh-Lynn-Shacham encryption keys to combine all signatures into one bulk signature and send them as a peer-to-peer message. In the block proposal pipeline, the validator starts proposing a new block as soon as two-thirds of the signatures are collected. This means that the process of proposing a new block and collecting the last third of signatures occurs simultaneously.

The end result of these improvements is a significant reduction in block completion time to one or two seconds in a real mainstream network environment. The two second completion is an advantage of near-instantaneous downtime in the digital asset industry, as Bitcoin (BTC) and Ether (ETH) take minutes to confirm at a higher cost. In comparison, this is a speed that meets the expectations of ordinary users using plastic cards at the grocery store.

Another solution that many blockchain projects are trying to use is called hashing. The hashing method splits the database into smaller chunks so that nodes can process transactions faster and also update the ledger in real time.

Sharding has been widely recognized as the best solution for achieving blockchain scalability as it increases the number of transactions per second and requires less memory for nodes. Sharing solves the problem of blockchain convexity without compromising decentralization and security. Bloating indicates the problem of finding enough memory to store the huge amount of accumulated data.

Other solutions are also being explored, although they have not yet been implemented online. Danish researchers have proposed a solution that includes a separate level of verification to achieve the goal, overlapping with the standard block verification process. However, its effectiveness on the mainnet has yet to be proven.

It is necessary here. Fast completion opens up opportunities for DApp developers to create the fastest, easiest-to-use applications in the real world. For example, Brian Brooks, acting head of the Office of Foreign Exchange Control, recently wrote to the Financial Times about his vision of “independent banks.”

Source: CoinTelegraph