[Illustration] Blockchain scalability problem

What is a scalability problem?

If many people use virtual currency and the number of transactions increases, the processing capacity of the blockchain will be exceeded, causing delays in remittances and soaring fees.

We call this the scalability problem.

As introduced in the previous article, the processing capacity of virtual currency is not high when considering its use for normal payments. Below is the difference in processing speed compared to credit cards.

Number of transactions that can be processed in one second (TPS: Transaction Per Second)

Bitcoin: 5~10TPS

Credit card VISA: 1700TPS

In addition to Bitcoin, where transactions are becoming more active, the development of DApps has become more active in recent years, and improving the processing capacity of Ethereum has also become an issue.

Solution

In general, a system that operates in a distributed environment increases the number of nodes participating in the system to improve processing power. scale out ensured scalability.

However, in the case of blockchain, each node does not divide work in parallel, and all nodes do the same work, so processing capacity does not change even if the number of nodes is increased.

Below, we will introduce how to solve the scalability problem of blockchain by pattern.

Off-chain type

The off-chain type is to improve the processing capacity by performing only the processing that should be on the blockchain on the blockchain and leaving the rest outside the blockchain.

Since there is no need to share data among all nodes outside the blockchain, high-speed processing can be achieved.

In this way, it is possible to perform some processing externally while cooperating with the main blockchain. Layer 2 (second layer)technology.

However, this method does not reduce the amount of processing per node, so it is not a direct solution to the scalability problem, but a means of improving performance.

Below we introduce Layer 2 for Bitcoin and Ethereum.

Lightning Network

Lightning Networkteeth, Bitcoin By Layer2 of A technology that realizes high-speed and low-cost transactions between any two parties that have not opened a payment channel (remittance route) by passing through multiple payment routes between the two parties..

I think it is difficult to imagine the mechanism immediately from this explanation. First, I found a clear example of a transaction between two parties.

 For example, Mr. A and Mr. B launch a payment channel where they manage 5 BTC each with their private keys  , a total of 10 BTC. When Mr. A remits her 3 BTC to Mr. B, the bitcoin remittance is completed by changing the bitcoin ownership of both parties, which is 5 BTC each, to 2 BTC for A and 8 BTC for B. increase. This change requires the consent of two people with administrative rights, and either party can decline the transaction. Similar transactions can be made between two people any number of times, and when the payment channel is finally closed, only the final distribution ratio will be recorded on the blockchain.

And this remittance mechanism does not necessarily require the opening of a new direct channel between the two parties, and it is possible to conduct transactions through a third party through an existing channel.

Since it is necessary to make a deposit of the estimated remittance amount to launch a new channel, the use of existing channels will lead to a reduction in unsent and useless deposits.

By the way, when using a third-party channel, Bitcoin is not deposited but is managed jointly with the trading partner, and since the private keys of both parties are required for transactions, Bitcoin is not used. You cannot run away.

Raiden Network

Lightning Network was Layer 2 of Bitcoin. On the other hand, Layer 2 of Ethereum has Raiden Network and Plasma.

Raiden Network is a technology that applies the idea of ​​Lightning Network to Ethereum. A platform for trading Ether and ERC 20* compliant tokens at high speed and low cost aim to build an *ERC20: Standard for tokens that can be managed in the same wallet

In addition, off-chain transaction details are not immediately published to the blockchain, and the timing of importing can be adjusted, so it can be used to enhance privacy.

However, it also has the disadvantage of not being able to execute smart contracts.

Plasma

Developed with Raiden Network as Layer 2 of EthereumPlasmais.

Specifically, it is a technology that improves the processing performance of a blockchain by creating another blockchain that connects to the blockchain itself and shares the processing with other chains.

Only record the final result in the main chain.

For example, as shown in the figure below, by allocating roles to sub-chains, processing capacity can be improved, and since each chain does not have to read all the data, processing can be made more efficient.

Also, since DeFi is currently active on Ethereum and Gas (fee) tends to rise, you can expect to be able to use it with low Gas (fee) by using Plasma.

Casper

Casper is a consensus algorithm that is scheduled to be implemented in the future on Ethereum and is a type of PoS.

There are two types of Casper.

Casper FFG (Friendly Finality Gadget)

What is Casper FFG? A hybrid method of Pow and PoS, in which miners generate blocks with PoW, and validators (data verifiers) confirm the blocks with PoS every 100 blocks.is.

Validators can participate in validation by paying a deposit. Ethereum seems to require 32 ETH (about 1.2 million yen) as of February 2022.

A vote of 2/3 of the deposit amount is required to justify 100 blocks. Also, the next justification makes the previous block final.

Also, deposits are restricted to withdrawals for about 4 months, and if the validator violates during that time, that is, if they vote incorrectly, the stake will be forfeited.

By doing so, we give validators an incentive to vote and confirm the correct chain. this functionSlashercalled.

Casper CBC

CBC is not a hybrid with PoW like FFG, Pure PoSIt is a method aiming at the implementation of

In other words, by launching your own node and participating in the blockchain network, you gain the authority to generate new blocks and vote by being selected as a validator.

Compared to Casper FFG, it has the advantage of being able to easily prove the security of consensus building because it is performed by PoS from the block generation stage.

On January 1, 2018, Casper FFG was released as a test net and implementation was underway, but after June of the same year, It has been announced that FFG will be scrapped and dedicated to Casper CBC.

Sharding

Sharding is an ancient method for database load balancing. On Ethereum, Technology for dividing data and processing refers to

Specifically, it aims to improve scalability by dividing the transaction processing group into side chains separate from the main chain to reduce the load on the main chain.

Validators are grouped by deposit amount to process data in small groups.

summary

Ethereum co-founder Vitalik Buterin and lead developers Justin Drake and Karl Floersch said at an event in Switzerland called TechChurch Sessions Blockchain, that Casper and Sharding will bring Ethereum 2.0 to life. will be constructed. "

Ethereum 2.0 is the next major update in which Ethereum will completely transition from PoW to PoS.

The technology introduced here is a technology that solves the scalability that is expected in the future.

Scalability will be a major issue in the future spread of cryptocurrencies, so it is likely that other cryptocurrencies will follow Ethereum.

In the future, it will continue to be a point of interest in the blockchain industry.

Below are reference books. I once again thought that the illustration explanation is a shortcut to understanding the complicated mechanism.