Block Chain and Its Limitations
All the hype around blockchain and the growing number of blockchain-based platform releases each year has also brought with it a plethora of worries surrounding them.
Blockchain, the underlying technology behind cryptocurrency is changing the way we make money and conduct our business activities. Yet, it has been unsuccessful in addressing the inherent limitations in its working.
While there have certainly been some noteworthy achievements, the technology has failed to live up to many expectations since the crowdfunding craze.
It has led to rising insecurity among some users and has made them grow sceptical about the whole concept of blockchain.
However, this hasn’t stopped various experts in blockchain from brainstorming on the whole idea of this decentralised platform, and they have come up with some exciting new advancements.
ARRIVAL OF ETHEREUM
With much fanfare, the world’s first blockchain-backed smart contract platform was launched in the year 2015 by Vitalik Buterin called Ethereum.
Unlike the blockchain’s earlier application bitcoin, Ethereum did not just exist in the form of a famous cryptocurrency, but it came to be known as the most established platform for developing decentralised applications based on Ethereum Virtual Machine(EVM).
Users are no longer required to fork an existing blockchain or create a new blockchain protocol to implement the technology. They simply have to submit code to EVM and pay the necessary fees(Gas) in order to make the network execute the instructions. It has made blockchain technology far more accessible than ever before.
Ethereum brought innumerable developers and budding entrepreneurs in the blockchain industry. However, their excitement started to settle down when the flaws in its functional design began to surface.
WHAT WENT WRONG?
Well, users demand perfection from such groundbreaking technologies and Ethereum, being one of the leading smart contract platforms, stood on the receiving end of a bashing from the critiques for a major limitation.
SCALABILITY
Smart contract platforms like Ethereum are just a sole blockchain with a single and shared network that result in minimal transaction processing per second.
Ethereum only has the capacity to process 15 transactions per second, which is incomparable to complicated applications, like Facebook or Uber that individually can perform thousands of processes per second to function.
The continuous increase in the number of user databases has exposed the scalability issues, and several questions are being raised regarding its capability to serve the high number of projects being built on it.
WHY DOES THE PROBLEM ARISE?
Well, Ethereum works on a network of nodes, where each node has to store the entire transaction history. Every single node processes the same transaction and makes the system verifiable as well as secure.
However, the whole process gets quite cumbersome and limits the scalability of the system. With the growing number of users every day, it is estimated that the total number of transactions will increase at a staggering rate of 10–12 seconds with every new block.
If developers start expanding the size of each block, then the data that these nodes need to store will start piling up and end up with kicking out people off the network.
IS THERE A WAY TO SOLVE THE SCALABILITY PROBLEM?
Yes, there are undoubtedly some scaling projects under progress that aim to tackle the above-mentioned issues, and one such project is “shrading”.
A big problem with a node network is its storage requirement for the updated versions of each account on the network. Shrading aims to move away from the traditional full node concept.
It requires each resulting node to store only a subset of data and verify those particular transactions. When a node needs information on the part it does not store, it will communicate with the node that has the relevant information.
However, this process cannot entirely be trusted as the nodes will have to rely on other nodes for information.
OTHER ISSUES
While scalability is the major limitation, several other drawbacks have contributed to limiting the usage of blockchain technology.
SECURITY
When a single organisation holds the control of the network’s mining power, the blockchain exposes itself to the ‘51% attack’. It will give the attacker an option to alter the blocks that are already a part of the blockchain. However, this can only be done when the attacker has a vast pool of resources at disposal.
THROUGHPUT CHALLENGES
Lower throughput is one major weakness that the users have identified in the blockchain. As seen above, even Ethereum can process only 15 transactions per second.
COMPLEXITY
Blockchain involves the use of complicated cryptography and beginners are finding it difficult to adapt to the technology. Also, transactions in blockchain involve digital signatures and verification by cryptography techniques that make the whole process tedious.
QTUM CAN SHOW THE WAY FORWARD
Founded by Patric Dai in March 2016 Qtum is a hybrid smart platform that allows the Ethereum Virtual Machine(EVM) to work on the entire Bitcoin system.
Using Bitcoin’s UTXO(Unspent transaction Outputs) model as its core infrastructure, Qtum can help you transfer Bitcoins among different owners and at the same time, create new UTXOs for transactions in the chain.
It maintains a parallel processing capability through which one can initialise transactions among multiple addresses. It is far more scalable and secure as one can easily trace back the history of transactions through the public ledger.
Another feature that makes Qtum stand out is its Decentralised Governance Protocol (DGP). It is a mechanism through which every user can vote for upgrades on the network and guards Qtum against the hard forks.
It also allows Qtum to adapt to changing network conditions and recover quickly from attacks on the network. These were the issues that earlier platforms of bitcoin and Ethereum struggled to solve in the past.
Backed by a solid team of over 150 developers and over 2.5 million token holders, this hybrid decentralised development platform surely has capabilities to slay the giants in the near future.
It is true that with countless blockchain-based developmental platforms coming up, it is going to be difficult for the users to choose the right one that is reliable, secure and suits their requirement at the same time.
DON’T LET THE GIANTS DICTATE THE FUTURE
You will find Qtum, as well as Ethereum, feature on platforms like Revain, and you can easily go through the user feedback and make your own call.
Whereas Qtum offers you features like UTXO and DGP, it is at a slight disadvantage to Ethereum as they’ve got some strong backing from the Enterprise Ethereum Alliance Members; which includes corporate giants like Microsoft, Intel, ING and Santander among many others.
To redress this balance, they are exploring the possibility of implementing Ethereum’s technology and are also contributing towards its development.
It is certainly not going to be a cakewalk for Qtum to gather support and pin down their competitors.
