On-Chain Scalability Solutions
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On-Chain Scalability Solutions

October 21, 2020      Deepshikha Gupta

1. Solutions Related to Block Data

The on-chain scalability solutions are relevant to block sizes. One solution is to resolve the scalability problem and to increase the block size. As larger blocks include more transactions. 

different approaches related to block data are:

  • Segregated Witness Solution to Scalability

SegWit pertains to Bitcoin increases block size limits on a blockchain. 

Segwit helps to increase the block size by pulling signature data from transactions. It prevents transaction malleability that reduces the transaction speed of Bitcoin. 

Transaction malleability is an attack that lets someone change the unique ID of Bitcoin transactions before it is confirmed on the network.

The main problem with the bitcoin network is the continuous increase in the number of transactions processed every single time, which in turn needs more number of blocks to be processed. Segregated witness (SegWit) segregates the digital signature from the transaction data, which contains almost 65% of the space in the given transaction.

Transactions which are shared across multiple crossing consists of two components, an input, and an output. There could be one or more inputs involved in a transaction where the output is the public address of the recipient, while the input is the public address of the sender.

Since the digital signatures are detached from the transactions (or mainly input), there is no way of changing the transaction ID  without nullifying the digital signature. 

  • Block Compression

Block compression is another way to improve the throughput of blockchains. Txilm is a protocol that compresses transactions in each block to save the bandwidth of the network. It sorts the transactions based on TXIDs to reduce the probability of collision, which may occur when Txlim uses a TXID to represent a transaction.

2. Consensus

There are multiple consensus strategies for scalability such as:

  • Proof of work
  • Proof of stake
  • Delegated proof of stake
  • Practical byzantine fault tolerance
  • Hybrid consensus  

3. Sharding: A Practical Scalability Solution

Sharding means a breakup of datasets in a database. The breakup of a large database into several fragments and then storing each of them separately. 

It splits the blockchain into separate shards that contain their data. The method stores them into different servers hence reducing pressure onto the centralized servers which tends to increase as the number of users increases. Sharding is a way to solve this by breaking the network apart which in turn improves the search performance and enlarges store capacity.

Understanding Sharding

The major problem with any blockchain face is, the process becomes slower every time as more computers add to the network. This hurdle in the blockchain gives rise to the need for scalability requirements. 

The scalability issue of the blockchain makes the sharding process comes in. Currently, each node of the blockchain stores all the critical information, which includes transaction history, account balances, etc. The slow speed of processing becomes a hurdle again in the process of transacting millions of transactions. 

The three main traits any blockchain seeks are

  • Decentralization
  • Scalable 
  • Secure

In reality, no blockchain can achieve all of them at once. Thus different techniques of overcoming these limitations were introduced here and there. Sharding has the characteristics that keep check of the following limitations effectively. 

Let’s take an example of a transaction of a rental apartment from a real estate agent. Consider multiple shards for different entities such as customer documentary, property demographics, and payment crunch. These entities are stored in different shards, which makes the data easy to process. 

Sharding in a similar fashion divides the chain into vertical sections which can be shared among others. This characterizes the most important aspect of the blockchain, the decentralized ledger. A ledger is accessible to everyone and allows users to see all the transactions on it.

4. Directed Acyclic Graph (DAG)

Previously, the blockchains stored transactions are available in chain format. The chain format does not allow the blocks to mine simultaneously, which in turn becomes a limitation to the blockchain. 

The introduction of DAG has overcome this limitation. In which each block acts as a vertex and allows concurrent block generation to include more transactions.

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#blockchain #consensus #Directed Acyclic Graph #on-chain scalability #sharding
Deepshikha Gupta
Deepshikha Gupta

A student from a technical background, Deepshikha found Bitcoin in 2020 and has been an evangelist ever since. A B.Tech turned into a full-time crypto-writer, she tries to bridge the gap that currently exists between the crypto world and people from non-technical backgrounds, through her simplistic yet effective form of writing. She finds that her writing for cryptocurrencies can redefine the way the audience interacts with the crypto space.