Polkadot, Parachains and Parathreads
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Polkadot’s Answer to Security and Scalability Challenges in Blockchain. By Juan Antonio Lleó.
The significant contribution of blockchain technology by Bitcoin to certain problems posed in the case of electronic value exchange without the need for trusted third parties is undeniable. However, since Bitcoin’s early days, the scalability of the model was evident as a challenging issue to address. This is commonly referred to as the blockchain trilemma, with its three points being Decentralization, Scalability, and Security. It posits that favoring one aspect often comes at the expense of the other two.
By scalability, we mean the ability of the Bitcoin blockchain to grow in transaction numbers and for these to occur in the shortest possible time frames. One solution has been the addition of second-layer blockchains (Layer 2 solutions) to the main blockchain layer, such as Bitcoin’s Lightning Network.
With the emergence of Ethereum and thanks to the Ethereum Virtual Machine (EVM), which operates like a vast computer distributed across thousands of nodes and its ability to execute code fragments like Smart Contracts, the scalability issue became even more pronounced. The concern is not just about achieving a higher transaction rate but ensuring that all have the highest possible security level. Initially, the solution in the Ethereum-based blockchain ecosystem was to create Layer 2 blockchains, which rely on Ethereum to periodically batch many transactions. However, until that moment, these can be performed at a reasonable cost on this second layer.
Another approach to achieving the much-sought scalability is by creating independent blockchains, which are copies of Bitcoin, Ethereum, or other blockchains, but isolated from each other — known as Forks. In this case, besides having less security against external attacks, due to fewer financial resources than the main blockchains, one of the most significant issues is how to exchange liquidity between these different blockchains.
The typical solution involves creating protocols that act as Bridges between each blockchain needing communication. However, this has led to many security issues, and hackers have frequently managed to secure a large portion of the liquidity these Bridges safeguard. This model is known as Cross-Chain. To address these challenges, ecosystems like COSMOS propose a different model they call Inter-Chain. Using technology like IBC (Inter Blockchain Communication), each chain within the COSMOS ecosystem can communicate from the outset with any other blockchain that has pre-approved such communication, opening a channel for it. The IBC protocol has proven its robustness over the years, and solutions are currently being tested to expand it to other blockchains like Polkadot, enabling communication with all COSMOS ecosystem blockchains.
Polkadot
Polkadot is a blockchain created by, among others, Gavin Wood, who is also one of the co-founders of Ethereum and proposed and developed the Solidity language. One of its goals was to address the challenges faced by both Bitcoin and Ethereum. The strategy was, on one hand, to change the consensus mechanism for block creation from one based on Proof of Work to one based on Proof of Stake. On the other hand, the main Polkadot network, called the Relay Chain, provides a robust Shared Security system to each blockchain within its system. Participation in the Polkadot network primarily involves a specific blockchain project acquiring a slot (Slot) within the Relay Chain for a set period through an auction. This is known as a Parachain. Let’s delve deeper into its main features.
Why Parachains
Parachains address two fundamental challenges of blockchains:
- Scalability: Having a single blockchain for various purposes makes scaling for future implementations and updates challenging, possibly benefiting certain goals at the expense of others. However, having different blockchains will allow them to implement new features without affecting other chains.
- Flexibility: It’s fair to say that a blockchain might excel at solving one issue but falter when juggling multiple issues. A blockchain tailored to a specific challenge maximizes efficiency for both itself and its users. Parachains are purpose-built blockchains, highly specialized, which can leverage advantages offered by other Parachains through cooperation.
Shared Security
Shared Security, sometimes termed Pooled Security, is a primary value proposition for chains considering becoming a Parachain and joining the Polkadot Network. From another perspective, Shared Security implies that all Parachains connected to Polkadot’s Relay Chain and renting their own Parachain Slot benefit from the economic security provided by the Relay Chain’s validators.
Shared Securit vs. Inter-Chain Protocols
The concept of Shared Security differs from Inter-Chain protocols built on a Bridges architecture. For Bridge protocols, each chain is considered sovereign and must maintain its set of validators and economic security, as previously discussed. A significant concern with these protocols is the scalability of security.
Polkadot overcomes scalability security issues by managing economic incentives within the Relay Chain, enabling Parachains to have robust assurances from the outset (even from the genesis block). In contrast, sovereign chains must expend much more effort to grow their coin value and ensure adequate protection against financially potent attackers.
Another significant proposal for different Parachains to benefit from Polkadot’s network advantages is through the Parathreads model, allowing occasional use of the main network without having to secure a limited and expensive dedicated Slot.
Parathreads
Parathreads are a solution for Parachains to temporarily avail of Polkadot’s security without having to lease a dedicated Parachain Slot for an extended period. This is achieved by temporarily sharing the scarce Parachain Slot resource among several competing resources, known as Parathreads, among chains that otherwise couldn’t secure a full Parachain Slot. The concept mirrors computer thread parallelism, where a single processor can run multiple tasks simultaneously, significantly enhancing processing capacity and speed.
To address the scalability challenges faced by most current blockchains, while maintaining robust security, various models are being
proposed. Among these, Polkadot’s Parachain and Parathread model offers a compelling vision for the future of blockchain ecosystems. The Polkadot ecosystem, through the mechanism of Shared Security and specialized chains, brings both scalability and heightened security into the fold. The coming years will surely be a testament to the efficacy and adaptability of this model in the ever-evolving blockchain landscape.
