Near-instant onchain transaction speeds and finality coming to Electroneum
We’ve been working on some major upgrades to the Electroneum blockchain in recent months, chief among them being our Ethereum Virtual Machine (EVM) integration. In conjunction with this project, the blockchain team have been hard at work on several other significant upgrades, including the transition towards a new blockchain consensus algorithm that will reduce block confirmations to just five seconds, bringing near-instant transaction speeds and finality to Electroneum blockchain transactions.
What is a consensus algorithm and why is it important?
The consensus algorithm is a critical component of a blockchain’s infrastructure, as it directly impacts the network’s security, scalability, and performance. The choice of consensus algorithm depends on the specific needs and goals of the blockchain, as each algorithm has its own strengths and weaknesses.
Electroneum is a permissioned blockchain network that primarily values security and scalability. The move to a new consensus algorithm, in this case, Istanbul Byzantine Fault Tolerant (IBFT), enables the team to maximise the blockchain’s scalability to a significant degree whilst maintaining the network’s security.
How does IBFT consensus algorithm work?
IBFT functions using a fixed set of known and trusted validators that are responsible for validating transactions and adding new blocks to the blockchain. The validators take turns proposing blocks, and each block proposal must be validated and signed by a quorum of the other validators before it can be added to the blockchain.
The validation process in IBFT is designed to ensure that the blockchain is resistant to Byzantine faults, which are failures or attacks that can occur when some of the validators behave maliciously or fail to communicate with each other. It uses a three-phase consensus protocol to achieve fast and efficient finality:
- Proposal phase: A validator proposes a new block to the network.
- Prevote phase: The other validators individually validate the proposed block and send their votes (prevotes) to the network. A block is considered valid if it receives more than two-thirds of the prevotes.
- Precommit phase: Once a block receives enough prevotes, the validators send their precommits, which finalize the block and add it to the blockchain. A block is considered final if it receives more than two-thirds of the precommits.
Once a block is added to the blockchain, it cannot be changed or tampered with, which makes IBFT a very secure consensus algorithm and a perfect choice for high-performance applications where trust, security, and efficiency are important — particularly for large businesses where even the smallest possibility of a reorganisation can result in significant and unnecessary costs.
Why is Electroneum transitioning to IBFT?
Electroneum’s mission has always been to simplify digital payments, whilst making them more accessible, faster, and cheaper to use. AnyTask.com showcases how the Electroneum blockchain can facilitate greater efficiency in the digital payment space, providing freelancers the ability to earn online without the need for a bank account. Transaction size becomes irrelevant allowing both micropayments or larger payments to quickly send or arrive from anywhere in the world, almost eliminating transaction and cross-border fees.
Electroneum has continued to strive for greater security and scalability over the years, whilst simultaneously limiting it’s impact on the environment. Unlike Proof of Work (PoW) and Proof of Stake (PoS) consensus algorithms, IBFT does not require a computationally intensive process for block validation or creation. A transaction is considered final and immutable once it has been validated by a certain number of validators in the network. This ensures that the payment is settled in near real-time with instant finality, meanwhile maintaining Electroneum’s commitment to low energy usage.
What is blockchain finality and why is it important?
Blockchain finality refers to the irreversible confirmation of a transaction or block on the network. Once a transaction or block has been added to the blockchain, it becomes part of the permanent, unalterable record of the network. Finality is important because it ensures that the network reaches consensus on the order and validity of transactions, and prevents double-spending or other fraudulent activities.
Blockchain finality is particularly valuable to businesses because it provides a high degree of certainty and trust in the transactions that occur on the blockchain. Slow times to finality, such as with Bitcoin (averaging 60 minutes) and Ethereum (averaging 5 minutes) pose a risk to businesses, and therefore requires additional mechanisms to be put in place, which ultimately leads to additional costs and complications.
In contrast, a five-second finality means Electroneum can compete with other enterprise-grade blockchains in providing a platform upon which businesses can operate and build upon, whether that’s in the payments space or in a Web 3.0 environment. The benefits include:
● Increased Efficiency: Finality increases the speed and efficiency of transactions, as parties do not need to wait for confirmations or approvals from intermediaries or other third parties. This can save time and reduce costs associated with traditional transaction methods.
● Reduced Fraud and Error: Finality ensures that once a transaction has been confirmed and added to the blockchain, it cannot be reversed or altered. This helps to reduce the risk of fraud or errors in transactions, and ensures that all parties involved have a clear record of what has occurred.
● Enhanced Security: Finality provides a high level of security and protection against unauthorized access or tampering. This makes the blockchain an attractive option for businesses that need to store sensitive data or conduct transactions that require a high degree of security.
● Streamlined Processes: Finality on the blockchain can simplify and streamline complex processes, such as supply chain management and cross-border transactions. By reducing the number of intermediaries and increasing transparency, blockchain finality can help businesses to improve their operations and reduce costs.
With the forthcoming introduction of smart contract capabilities, 5-second block confirmations with instant finality puts Electroneum amongst the most capable blockchain solutions today. For those businesses wishing to explore Web 3.0 capabilities, Electroneum is an ideal choice for those prioritising transaction speed and finality, in addition to some of the other new features coming to the Electroneum blockchain later this year.
How does this faster finality affect Electroneum’s instant payment system?
Electroneum realised the requirement of super fast transaction speeds was essential to a real world cryptocurrency that was designed for adoption. As such the Electroneum Network released an instant payment system in 2018, which still provides some cutting edge technology that is only benefitted by this blockchain enhancement. The instant payment system will still provide instant notification of funds arriving, along with Push notifications in the Electroneum app, but this change will mean those funds are “spendable” within seconds too. All the Instant Payment API functionality for shopping cart technology will still function the same, making Electroneum the best choice for instant payment cryptocurrency integration.
We hope you enjoyed reading this article. In our next update, we aim to provide you with a closer look at Electroneum’s progress with the EVM integration, as well as an insight into some of the other features coming to the network later this year. Until then, stay tuned via our social media channels:
● YouTube
● Telegram
