Over the years, people made a lot of different block chain scaling solutions, fragmentation and increased plasma from Segwit and block size. Each solution has its advantages and disadvantages, and there is a major debate about which solution is most appropriate.
The cryptocurrency continues to be mainstream. Over time, the number of bitcoin transactions per day is rising. The problem is that we still haven’t found a way to solve the scalability problem.
Why is there a problem with blockchain scalability?
The original design of cryptocurrency did not take into account the idea of widespread use and adjustment. As the number of daily transactions continues to increase, more and more problems arise.
Many crypto enthusiasts still want cryptocurrencies to eventually compete with companies like PayPal (PayPal – the world’s largest online payment platform) and Visa (credit card brand). However, as far as the current situation is concerned, the blockchain is far from doing this.
Visa is currently the fastest payment network. It can process approximately 24,000 payments per second. In contrast, PayPal can handle approximately 193 transactions per second.
Most cryptocurrencies are still far behind. Ripple is a heterogeneous, processing up to 1500 transactions per second, which suggests that it is likely to become a viable payment method in the future.
At the same time, Bitcoin and Ethereum traded at even lower speeds of 7 and 20 times per second. This problem seriously hampers the possibility of becoming a mainstream payment solution in the future.
The transaction speed of a cryptocurrency depends on the time it takes to add a transaction to a block and the time it takes to reach a consensus.
Workload Proof (PoW) vs Proof of Entitlement (PoS)
Currently, the two most popular mining protocols are PoW and PoS.
However, both protocols have major problems. First, the Bitcoin PoW protocol has spurred quite a few individuals and organizations to buy more hardware and build huge mining farms, although Bitcoin is considered the most fragmented blockchain. Therefore, most hashpower is now controlled by a few organizations.
The PoS protocol has some advantages over the PoW protocol. For example, the computational power requirements are slightly lower, the power consumption is slightly lower, and the transaction speed is slightly faster, which explains why Ethereum decided to implement it as part of the Casper update. However, the agreement also has its own problems.
With the PoS protocol, the larger the user’s bet, the greater the chance that they will get a block reward. This again means that this system is mainly for large organizations with large amounts of money.
IOTW Proof of Action (PoA) Agreement
To solve these problems, IOTW recently invented a new mining method called Proof of Action (PoA). This method requires much less computing power than PoW and PoS, so that even ordinary appliances have the ability to dig IOTW coins without significantly increasing power.
Most notably, the PoA protocol is much faster than the PoW and PoS protocols, making it a potential solution to the scalability issues facing the current blockchain. The PoA protocol has been able to process thousands of transactions per second, far ahead of Bitcoin, Ethereum and most other major cryptocurrencies.
Their goal is to reach 1 million/tps, which will enable them to handle more transactions than Visa.
Another benefit of the PoA protocol is that it is fully compatible with IoT devices and there is no risk of power or memory loss. Considering that the IoT industry is expected to grow substantially, this will be crucial in the coming years.
Finally, the blockchain is widely used, the most important of which is its ease of use and convenience. Users want to dig IOTW coins without having to purchase additional software. They can simply download the firmware and start digging immediately.
Over time, the company even pre-installed IOTW in the device to make the process easier.
Proof of Equity (DPoS) Agreement
Although its name hardens very much like the Proof of Interest (PoS) protocol, the DPoS protocol is actually very different. In this mechanism, the token holder does not actually vote for the validity of the block. Instead, they elected representatives to do this.
Although PoW and PoS require miners to compete with each other, DPoS allows miners to collaborate on manufacturing blocks. Therefore, DPoS runs much faster than other consensus mechanisms .
Currently, the mining of bitcoin blocks takes about 10 minutes. On the other hand, EOS – one of the first cryptocurrencies to implement the DPoS protocol, as well as Steemit and Bitshares, has an average blocking time of less than one second.
The advantages of this type of agreement are: cheap transaction costs, enhanced scalability, and energy savings. The main disadvantage of this protocol is that it is partially centralized.
The future of blockchain scalability
Over the years, many different blockchain scaling solutions have been proposed, ranging from Segwit and block size to sharding and plasma. Each solution has its advantages and disadvantages, and there is a major debate about which solution is most appropriate.
However, one thing is certain: in order to support the increased use of cryptocurrencies, we need to step up our efforts to find the right expansion solution.
Whether this problem can be completely solved remains to be seen, but so far, the results seem to be promising.
[su_quote]This article is writing on 12 Aug 2018 based on information available online & news portal. If you feel it’s outdated or incorrect, please write here to update it. Mail us: [email protected] Or Whatsapp Us- +13098896258[/su_quote]