By 2020 there will be around 50 billion devices connected to the Internet. Most of these will be Internet of Things (IoT) devices. Things like smart locks, key rings, gadgets and kitchen appliances that are taking up a whole new life when connected online.
Most of these billions of devices are already communicating with each other, without human intervention. AI and machine learning are also becoming important to make this machine-to-machine communication more useful. The infrastructure needed to support these kinds of digital economies will have to be extremely fast. Achieving this kind of scale in a secure, decentralized network is the greatest technical challenge that the crypto industry has faced.
Blockchains and the Scalability Concern
The issue of blockchain scalability is probably the one that raises its head most often, alongside regulation. Depending on the method of consensus, block size (if applicable) and underlying technologies being used, blockchain speeds — transactions per second or ‘tps’ — have been reported from anywhere between 2tps and theorized millions of tps. Scalability is the biggest selling point of alternatives protocols to Bitcoin and Ethereum. It is almost certain, there will be a trade off in one area (security, decentralization, computing power or other) when trying to dramatically improve scalability.
USD289m worth of BTC transferred for USD0.04 in fees
And, unless the number of transactions per second that a network can handle is sufficient, the blockchain will not be able to be used for a number of solutions to which it could hold the key, such as micropayments, or industrial applications. As blockchain technology opt to improve security and usability of Internet of Things, Big Data and AI, there is a need to process potentially millions of transactions per second. Similarly, unless confirmation times are low enough, using blockchain are not going to be acceptable for everyday use cases.
Current transaction speeds
Transaction speed may vary depending on network conditions. What we have listed here is average transaction speed in minutes for confirmed transactions in the first block after it was sent.
- Bitcoin transaction speed on average is 78 minutes.
- It’s limited to just 3tx per second through an artificial block size.
- You can increase it by 100tx per second and not run into your computer’s limit.
- Today, Bitcoin fees are rising and even if the blocks are becoming full, transactions are not quickly receiving confirmations.
- Bitcoin currently has a 1MB block size limit.
- Ripple transaction speed on average is 4 seconds.
- The daily transactions on its network have increased in the past 6 weeks from 160,000 to over 1 million.
- Their XRP Channel Payment’s scalability level is the same as Visa.
- The company aims to change the traditional solution for financial payments.
Bitcoin Cash >>
- Bitcoin Cash transaction speed on average is 60 minutes.
- It has a block size limit of 8MB.
- Exchanges have acquired confirmations in high numbers on deposits because Bitcoin Cash is prone to a double spend attack.
- Awfully long delays are experienced because of issues on its security and stability.
- Litecoin transaction speed on average is 30 minutes.
- It has a 56tx per second maximum capacity.
- Transaction verification is instant.
- Transaction cost is very low.
- Ethereum transaction speed on average is 6 minutes.
- When it comes to block generation time, it is considered to be the fastest cryptocurrency in the world.
- Its maximum capacity on earlier tests showed it reached 25tx per second.
- The maximum gas that can be processed by an individual node is limited.
- Its scalability has had improvements with Sharding and PoS.
- Nano transaction speed takes on average 5 seconds.
- It uses the Block Lattice technology.
- Transactions cost nothing.
- Nano offers unlimited scalability.
- EOS transactions take on average 1.5 seconds.
- The EOS network handles up to 50,000 txs per second.
- EOS has low transaction fees.
- The network is highly secure and scalable.
- Dash transaction speed on average is 15 minutes.& Currently, it has a 28tx per second limitation.
- 2MB block size change limitation that allows up to 56tx per second.
- Built to enable faster transfers.
- Tron transaction speed on average is 5 minutes.
- The Tron network handles 1500 txs per second.
- Transaction costs are extremely low for Tron payments.
- It has high scalability and numerous use cases.
- Cardano transaction speed on average is 5 minutes.
- Every transaction comes with a proof of legitimacy.
- Each node on their network accepts and verifies transactions.
- Iota transaction speed on average is 3 minutes.
- No transaction fees and scaling limitations.
- The more you throw at Iota, the fast it’ll get.
- You have to confirm 2 previous to transmit your current transaction.
- Zcash transaction speed on average is 15 minutes.& It has a blocksize of 2MB.
- Zcash has pretty low transaction fees.
- The Zcash network offers tight privacy and security.
- Monero transaction speed on average is 30 minutes.& It has one of the most dynamic block sizes.
- It can theoretically handle 1,000tx per second using a modern hardware and if the bandwidth will allow it.
- Vechain transaction speed on average is 6 minutes.
- It does not have a block size limit since it’s a dApp.
- Vechain’s transaction fees are extremely low.
- The Vechain network can handle up to 10,000 txs per second.
- Nem transaction speed average is 30 seconds.
- On an experiment done, it had a transaction average rate of 3,085.77tx per second in less than 1 hour.
- It currently has 10.8 million accounts and into sequence transactions over a steady stream of transactions, they use a written application.
- Stellar transaction speed average is 5 seconds.
- Transaction cost is very low at 0.00001 lumens on every transaction.
- Validating node is easier to run.
- It has a distributed exchange.
- Neo transaction speed average is 15 seconds.
- It does not run on PoW but its PoS protocol is more streamlined.
- It can do 1,000tx per second and maximum of 10,000tx per second.
The ‘Scalability Trilemma’ is a term coined by Ethereum founder Vitalik Buterin that addresses the problem of how to develop a blockchain technology that offers scalability, decentralization and security, without compromising either one.
This this is a core component of what it means to run Blockchain system. Decentralization allows networks to be permissionless and censorship-resistant, giving anyone the power to use and build on them. Decentralization alone isn’t scalable because decentralized systems operate on consensus, which means decisions (such as verifying transactions) are made by a group of nodes as opposed to an individual node.
It is only on a decentralized network that immutability and peak security can be achieved, because what better place to store sensitive data that on a network that has no single ‘central’ point of failure.
Without being able to increase the speed and size of a Blockchain network, we can’t ever hope to impact more than just a handful of people. Real industrial applications require that the consensus process become faster and more efficient without also becoming centralized.
When looking at the number of transactions per second, blockchains are often compared to PayPal, which has around 200 tps, and Visa, which averages about 2500 tps but has a peak of 24,000. Compared with the original Proof of Work Bitcoin blockchain, with 2 to 7 transactions per second (although 16 tps have supposedly been recorded) and a block time of 10 minutes, traditional methods have the upper hand.
Ethereum also began using Proof of Work but has plans to move to Proof of Stake. Currently it manages to process between 15 and 25 transactions per second with a block time of 15 seconds. This is superior to the original Bitcoin blockchain in terms of scalability but still not usable for worldwide adoption. As one of the largest blockchains, Ethereum has a lot of public interest and has been very vocal on its need to scale and the methods it will implement in the near future to achieve this.
Private blockchain Hyperledger Fabric does not tend to publish its transaction rate but there is reference to it achieving in excess of 3,500 tps and uses a Practical Byzantine Fault Tolerance System which has been described as scalable to tens of thousands of tps.
Why isn’t the blockchain scalable?
In order to scale, the blockchain protocol must figure out a mechanism to limit the number of participating nodes needed to validate each transaction, without losing the network’s trust that each transaction is valid.
- Since every node is not allowed to validate every transaction, we somehow need nodes to have a statistical and economic means to ensure that other blocks (which they are not personally validating) are secure.
- There must be some way to guarantee data availability. In other words, even if a block looks valid from the perspective of a node not directly validating that block, making the data for that block unavailable leads to a situation where no other validator in the network can validate transactions or produce new blocks, and we end up stuck in the current state. (There are several reasons a node might go offline, including malicious attack and power loss.)
- Transactions need to be processed by different nodes in parallel in order to achieve scalability. However, transitioning state on the blockchain also has several non-parallelizable (serial) parts, so we’re faced with some restrictions on how we can transition state on the blockchain while balancing both parallelizability and utility.
Scaling the blockchain is a known challenge and has been an active area of research for several years. SegWit (Bitcoin-only), Off-chain state channels, Sharding, Plasma, Off-chain computations, Proof of stake, Blockchain rent, decentralized storage service or Lightning are attempts to fix scalability issues.
#DBOS, Distributed Blockchain Operating System is a permissioned blockchain protocol in block-tree structure, a network of interconnected block chains supported by a single main-chain. The main-chain is used to provide the majority of the peer to peer network security, whereas side-chains can be optimized for application specific needs. DBOS aims to solve scalability without compromising security and decentralisation.
DBOS aims to address the drawbacks of current technology
Transforming from traditional singular linked chain concept to a block-tree type
Its innovative side-chain concept allows side-chains to be other protocol types linked to the DBOS main chain, addressing any cross-chain incompatibility.
Aim to attract millions of developers by offering open source software and application templates, DBOS will be the next Ethereum, without any drawbacks.
THE Blockchain technology for Databases, Servers and Web Hosting, Low Latency Voting Systems, Games, Smart Contracts, Patent Recording, Payment Systems and many more.
Sources: D.B.O.S, Hackernoon, Cisco, Cointelegraph, Coinbureau