The Battle for Scaling Transactions

transaction support
A total number of transactions supported by ethereum has surpassed the combined transaction volume of all other cryptocurrencies in the past 24 hours.

Over the past few weeks, support for large transaction volumes has been at the heart of all design and other discussions in the cryptocurrency ecosystem. Scaling has two key aspects to it. Firstly, the ability to support large number of transactions (count). This means the underlying network should authorize the exchange of value, by Byzantine fault-tolerance and double spending prevention. Secondly, the time to validate each transaction on a network of nodes that are globally distributed should be within reasonable limits to allow for real-time trade. Though a sub-second (millisecond) transaction time is ideal, for most real-world systems such as a POS a confirmation on the blockchain is not possible and may not be required. Payment systems, point of sale systems, etc. will need to use completely different mechanisms to validate transactions  in real time, be it for either the bitcoin or for ethereum.

Currently, bitcoin’s block confirmation time is around 8 minutes as per this chart. If the Segwit2X performance enhancement was rolled out, this time would have reduced to under a minute.

In fact, in the real world it is much more delayed because at least 6 confirmations are needed for confirming a new transaction.

Comparing this with Ethereum’s block confirmation time, Ethereum has been able to, despite the surge in volumes, keep the block confirmation times to under 0.5 minutes (or less than 30 seconds). This is because of their most recent network upgrade that was not contentious as the Segwit2x and had wholesome support from the ethereum community.

Eventually, in my opinion, the cryptocurrency battle, will in the short term be based on scaling. The payoffs for the platform that scales the fastest in terms of two parameters i.e. transaction time, and, transaction count (volume) will be the highest.

1 thought on “The Battle for Scaling Transactions”

  1. Payment systems, point of sale systems, etc. will need to use completely different mechanisms to validate transactions in real time, be it for either the bitcoin or for ethereum.

    Well Dash can already do with their instant send technology you can accept a transaction trust less within less than 3 seconds. It’s unlikely bitcoin or ethereum will implement anything similar in the near term future. In case of bitcoin, the blockchain that try to avoid any hardfork what so ever it seems unlikely it ever will. In case of ethereum, their tech is so cutting edge at it’s simply to experimental to deem safe for in shop purchases, at any rate ethereum has different use cases, and should remain so for the foreseeable future.

    Adobtion of dash for these kind of purposes would be the quickest, easiest, most affordable solution to date, and with evolution at the end of the summer of 2018, it will also be the most user friendly.

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