Blockchain scalability refers to a blockchain’s ability to serve a large number of businesses and users without sacrificing performance. It’s easy to see why scalability is important— if a single blockchain only has the capacity to handle, say, a few hundred users, then that blockchain can never achieve widespread usage. For hundreds of millions, or even billions, of people to adopt blockchain and digital currency, the technology must be able to scale.
While blockchain is now more than a decade old, it is still an emerging technology in the early stages of development and there are many projects working on various blockchain scalability solutions. The approaches may vary but the objective is always the same: to develop a blockchain that can provide adequate performance while serving hundreds of millions of people, or more.
This post will discuss the scalability challenges that blockchains face, describe a few prominent approaches to overcoming these scalability problems, and explain how Komodo's cutting-edge scalability solutions work.
The Blockchain Scalability Problem Explained
The Bitcoin blockchain performs, on average, about 3 transactions per second (TPS). It has, at times, handled as many 6 or 7 TPS. The Ethereum blockchain can process slight more, at around 15 TPS. The Komodo blockchain is much faster but still tops out at 200 TPS. It might be hard to put these figures into perspective, so let’s compare them to some mainstream payment processing services.
Perhaps the most famous global payment processors are Visa and Mastercard. Visa routinely processes 150 million transactions each day, which averages out to more than 1,700 TPS. That’s about 240 times as many transactions as the Bitcoin network has ever processed in any single second. And Visa claims to have the ability to handle as many as 56,000 TPS.
Mastercard boasts similar numbers, claiming to “have the capacity to process as many as 140 million payments every hour worldwide.” This works out to just under 39,000 TPS— not quite as many as Visa but still hundreds of times more transactions than Bitcoin has ever carried out in the same timeframe.
What about other digital payment processing services? PayPal averages only 193 TPS, although it processes as many as 450 TPS during peak payment periods. This seems low when compared to Visa and Mastercard, but still beats Bitcoin by an enormous margin.
At this point, we can begin to understand the scalability problem. There are about 7.8 billion humans living on Earth, and there are a great many transactions taking place every second. For any cryptocurrency to become truly useful on a global scale, it would need to be able to process tens of thousands of transactions per second, or more.
"Because of its relatively poor performance, many observers do not consider blockchain technology to be viable for large-scale applications."
Blockchain and the Five Vectors of Progress (Deloitte)
Vertical Blockchain Scalability
The first dimension to blockchain scalability is vertical scalability. This refers to the ability of a single blockchain or single blockchain-based application to serve a large number of users.
Typically, a blockchain’s ability to scale vertically is measured in the number of transactions in can process per second, also known as throughput. As noted in the section above, Bitcoin can only handle 7 transactions per second (TPS) at the very most. In times of heightened price movement and therefore increased transaction volume, the Bitcoin network often experiences a backlog of unprocessed transactions. Some transactions can take 30 or 40 minutes.
The Ethereum blockchain maxes out at 15 TPS. While this is more than twice the throughput that Bitcoin is capable of, it often insufficient for the number of projects built on the Ethereum platform. According to Etherscan, there are currently more than 236,000 ERC-20 token contracts launched on the Ethereum blockchain at the time of writing. That means that it would take over four hours to process just a single transaction for every ERC-20 token in existence.
It’s important to state here that not all blockchains host applications and, conversely, not all blockchain-based applications have their own blockchain.
Some blockchains do not support smart contracts or applications. This variety of blockchain focuses on providing a digital form of cash, known as cryptocurrency. Bitcoin is the first and most obvious example of this type of blockchain. Other prominent examples include coins like Zcash, Monero, and Dash, all of which sought to improve upon the Bitcoin protocol and provide a better form of digital cash by adding privacy features.
Other blockchains were designed to act as a platform on which third-party projects can build smart contracts, games, applications, and other blockchain-based software. These projects are fittingly referred to as smart contract platforms. Ethereum is the most popular smart contract platform but there are plenty of others in this category— NEM, NEO, Tron, Tezos, and Cardano, just to name a few.
Note that a smart contract platform is just one blockchain that supports a number of third-party projects and applications. A logical consequence of this platform design is that third-party projects do not have their own blockchain. Instead, they all share the platform’s blockchain (and pay gas fees in the platform’s native coin for the opportunity to use it).
This leads to the second dimension of blockchain scalability: horizontal scalability.
Horizontal Blockchain Scalability
Horizontal scalability refers to the ability of many blockchain projects to co-exist and scale independently without being restricted by the presence of other projects. If a blockchain project can grow as needed in a particular environment, without diverting resources from other projects, then that environment can be said to offer horizontal blockchain scalability.
Blockchains that focus on providing a form of digital cash don’t offer smart contract support so they can’t provide horizontal scalability to third-party projects. At the same time, these independent cryptocurrency blockchains have horizontal scalability in the sense that tens or hundreds of thousands of them can exist without interfering with one another’s performance.
In fact, if anything, the existence of a large number of independent blockchains provides benefits to all projects. This is true for a few reasons.
First, people can use multiple digital currencies and run a full node on multiple blockchains with the same machine. This adds security and decentralization to each blockchain’s peer to peer network. Second, each blockchain can serve a different purpose and fulfill a different need. This increases the utility of digital currencies while also generating additional value. Finally, as each new blockchain seeks to fill a different niche, there is an abundance of innovation and technology that can be shared throughout the open source blockchain ecosystem.
When it comes to blockchain platforms, few can be said to offer horizontal scalability. As noted above, a smart contract platform is just one blockchain that hosts dozens, hundreds, or even thousands of third-party projects.
These third-party projects are locked in to the platform and forced to share the same blockchain. So if there are a large number of people that want to use the blockchain— that is, to make transactions— then there may be a long wait time. This also pushes up transaction fees and can make it unreasonably expensive to send a small amount of value on the blockchain.
In recent years, a new type of platform has emerged in the blockchain space: the multi-chain platform. This next-generation type of platform is built on a multi-chain architecture that provides every third-party project with an application-specific blockchain. Unlike smart contract platforms, multi-chain platforms offer horizontal blockchain scalability, as each chain exists independently of every other and they can all grow vertically without interfering with other third-party projects.
One prominent example of a multi-chain platform is the Cosmos Network. Cosmos gives every project an application-specific chain, known as a "Zone," and then connects all third-party chains through what's called the Cosmos Hub. Each Zone exists independently and can therefore experience rapid growth without deteriorating performance for the rest of the projects in the ecosystem.
Another prominent example of a multi-chain platform is Komodo. In fact, Komodo was the very first multi-chain platform in the blockchain industry. And not only did Komodo innovate the multi-chain architecture that is beginning to gain traction today, but Komodo has for years been the most advanced platform of this design, offering both vertical and horizontal blockchain scalability.
Komodo’s Current Blockchain Scalability Features
Komodo already addresses the blockchain scalability problem in one important respect. All projects that build with Komodo technology receive an independent Smart Chain. What happens on one chain does not affect any other chain in the ecosystem. If one project experiences rapid exponential growth, it will never inhibit other projects building within the Komodo ecosystem.
This represent horizontal scalability. Hundreds, thousands, or even millions of blockchain projects can all exist within the Komodo ecosystem without interfering with one another. The performance of every Smart Chain is unaffected by the activity on other Smart Chains launched with Komodo's technology.
Every Smart Chain created with Komodo's Antara Framework can natively process up to 200 TPS. But what happens when a single project grows beyond this capacity? How can one Smart Chain project process thousands or tens of thousands of transactions per second when needed? With Komodo's new blockchain scalability solution known as Multi-Chain Syncing.
Komodo’s New Blockchain Scalability Solutions
The Komodo Development Team innovated a feature called Platform Synchronizations that allows projects within the Komodo ecosystem to scale without limits. With this new tech, multiple Smart Chains can work in unison to function as a single chain. This means that any project on Komodo Platform can scale out linearly.
If one blockchain is no longer providing the performance you need, simply add another chain. This would double throughput capacity from 200 TPS to 400 TPS. If two isn’t sufficient, add a third. This would increase throughput capacity an additional 200 TPS to a total of 600 TPS. This process can be repeated until the desired performance is achieved. With Komodo technology, every project can scale on demand to keep up with the needs of their business.
Komodo’s Multi-Chain Syncing blockchain scalability solution demonstrated performance of over 20,000 transactions per second in a test environment.
At that rate, Komodo Platform could process a transaction for every person in Europe in the space of 13 minutes— which is approximately the same amount of time it takes some other blockchain projects to process just a small handful of transactions.
It’s easy to see the huge implications of this new technology. We’ve created a unified, scalable platform that can outperform any other blockchain platform on the planet.
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