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How The Scalability Problem Of Blockchain Started To Be Solved

You don’t have to make a tradeoff between security, scalability, and decentralization.

Since Bitcoin’s white paper is published, scalability became the biggest problem on the blockchain. When it was first designed, the only algorithm used in blockchain was the Proof of Work (PoW). It has resulted in not being scalable and also depends on increasing amounts of energy and is the longest chain for security reasons. To solve this problem, some solutions were introduced. However, most of the solutions couldn’t be implemented or had to be postponed due to various reasons. Now, Avalanche and IOTA have entirely solved the biggest problem on the blockchain. Here, we’ll have a look at how Avalanche and IOTA solved the scalability problem.

Various solutions before IOTA and AVA

Proof of Stake (PoS)

Proof of Stake algorithm has introduced a solution by staking their ethers to gain more instead of mining. Like in Proof of Work, power within the network lies in the people having the most stake in the network. Even though they can’t control the network by themselves, they can work with other shareholders to control the whole network at the same time. Still, this would result in the collapse of a network that makes all people lose their ethers. All in all, PoS has been seen as the most environmentally friendly alternative to PoW.

Delegated Proof of Stake (DPoS)

Delegated Proof of Stake works as shareholders directing their work towards third parties. So, they’d vote for the delegates that can protect their rights. These delegates will have the responsibility to create and validate the new blocks. And the stakeholders’ power of vote depends on its staking. Like in PoW and PoS, DPoS, both have a risk of centralization by having more coins available to stake or capturing the network power by having a sufficient amount of tokens under circulation. It became solved by the supply and demand as purchasing more coins to control the network. This concept allows the control of the network prohibitively expensive to attain.

Proof of Authority (PoA)

Proof of Authority is a concept that entered our lives with the hyperledger. In this algorithm, an entity would validate all the transactions in the network. Even though it’s one of the solutions implemented to solve the scalability problem, it has resulted in the centralization of power in the network. Entities where the need to store confidential information benefited from this approach.

How AVA and IOTA approached and solved the scalability problem?

The first reasonable solution was to implement a stochastic process. The main goal of the implementation is to create an equilibrium distribution to keep the network safe while not giving away from security, decentralization, or scalability.

Avalanche Network

Avalanche is the first network that applies the continuous process to solve the blockchain trilemma. According to test results, the Avalanche network has succeeded in scalability, security, and decentralization when compared to other networks. This was the first successful solution when all the blockchain platforms and consensus algorithms use a discrete-time process to make amends with the trilemma. In the future, Ava has opened a pathway to implement more effective consensus protocols with continuous-time processes.

According to you, how the scalability problem could be solved on the blockchain? Would you choose to solve the scalability problem with any of these platforms mentioned? Share your thoughts and experiences in the comments section below.




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Ata Tekeli

Ata Tekeli

Blockchain, blogging, statistics, mathematics and R&D.

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