Scaling plans for cryptocurrency

in #bitcoin6 years ago (edited)

So have you ever wondered how all the cryptocurrencies plan on scaling? Well as you guess this is what this post is about. Please note this is a generalized scaling ideas and as such each coin will have its own twist. I am talking about the major scaling plans so their might be more not listed. :)
Algorithms such as POW and POS do play a role in scaling but that a diff talk for a diff time.
So before you need to know on what the old way transactions are done. This is bitcoin pre-2017.
Bitcoin since has picked scaling plans.

So before a transaction would be stored ordinarily in a blocks. 1 MB blocks only fit in 2000 transactions. Increasing the blocks increase the amount of transactions that fit in. However since nodes need to store this data the bigger block=less nodes. Less nodes= less decentralization and security.
Now time to understand segwit.
Segwit is in a way a 2mb block soft fork that leads to one of the scaling plans.
Segwit is basically a clever hack
that removes some signatures
thus increasing block size
to 2 MB thus making 4000 transaction fit in one block
Segwit fixes mallabitly which leads to 2nd layer.

1.Bigger blocks
This is not my favorite solutions but it does some have some merits.
Increasing the blocks increase the amount of transactions that fit in. However since nodes need to store this data the bigger block=less nodes. Less nodes= less decentralization and security.
However some coin have masternodes:
Masternodes aim to fix this big blocks by paying people to run nodes
that way they can support full nodes. However it leads to a small node count. Do you have the $ to become a dash node?

2.The Lightning network
The Lightning network LN for short is a second layer solution.
More info on it:


As you saw on the video-the LN is kinda like a giant smart contract.
Potentially apps can be built on LN bc it is after all a smart contract system
https://steemit.com/bitcoin/@sames/lapps-what-they-are-and-how-many-are-there-now
The LN is out of beta but slowly being built. However the LN also depends on on chain tx to top up the LN so stuff like segwit and one day a small block increase must be added.

3.Sharding
Imagine that a chain such as eth or rsk has been split into thousands of islands. Each island can do its own thing. Each of the island has its own unique features and everyone belonging on that island i.e. the accounts, can interact with each other AND they can freely indulge in all its features. If they want to contact with other islands, they will have to use some sort of protocol.
The shards are basically like islands. So how do these islands communicate with each other? Remember, the purpose of shards is to make lots of parallel transactions happen at the same time to increase performance.
Sharding in a basic level is the break down the chain into subgroups
I wrote more about it here:
https://steemit.com/bitcoin/@sames/how-rsk-is-going-to-use-sharding

4.Sidechain
In short words-Fuck it-let create more chains with own tech to let more scaling to reduce stress on main chain. Sidechain pegged coin to the main coin. 1 sidechain coin= 1 bitcoin
One example is RSK
RSK achieves 100-300 transactions per second on chain and confirms most payments in less than 20 seconds, while leveraging Bitcoin's proof of work security(merged mining).
But with the Lumino Transaction Compression Protocol (LTCP), RSK will be able to process up to 2000 tps on chain! And once the Lumino Network is deployed over RSK, it will allow up to 20k tps off-chain taking Bitcoin to Visa processing levels.
You can read more about the rsk platform here:
https://steemit.com/bitcoin/@sames/bitcoin-s-ethereum-killer-rsk-co
You can read an extended scaling plan as well:
https://steemit.com/bitcoin/@sames/how-rsk-is-going-to-use-sharding
Another sidechain is liquid network :
https://steemit.com/busy/@sames/liquid-bitcoin-s-solution-for-exchanges

5.Parallel blockchains
Another proposal was to run parallel blockchains instead of one main blockchain. Basically, instead of making 50 DApps run on one main blockchain, have 2 blockchains and run 25 DApps each. There were two problems with this proposal:
Con:
It is not wise to split up the hashrate of a chain. The hashrate of the chain after all determines how secure it is from external hackers and fast the system is.
It will be easier for malicious miners to get 51% majority on the smaller chains.

6.Don't use a blockchain
In short words-basically saying fuck blockchains-let try something new.
Exp: IOTA
Cvery node verifies the last transaction in a consensus agreement set by code
In iota more nodes= more transaction since nodes are not storing data- mobile wallet can be nodes
letting them achieve their scale
Bad bc since no store-it is more buggy to use and lets to payment failures
I mean literally the coin may get lost.
Cool tech-unsure...
I am bias to this so let me just link a non bias post of iota:
https://coincentral.com/what-is-iota-cryptocurrency-coin/

So have any questions? These are basically the general view of scaling plans in the crypto world.

You might be wondering what scaling plan bitcoin will go right?
Well bitcoin has decided to use the LN as it main way to scale. Sidechain will aid in further scaling and features. The sidechain can use sharding. A sidechain can have its own sidechain. In RSK a sidechain will be made just for micropayments will the main sidechain RSK will be for Dapps

image.png
Image source:
https://99bitcoins.com/blockchain-technology/

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Probably mix of all things together is best...

well for most of them not the fuck the blockchain option. :)

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Increasing blocksize is not a proper way to scale in the long term and the lightning network makes bitcoin too centralized for me, adoption of the LN is going to be a mess, just like segwit was.

All this bad-aids are being put in place just because bitcoin was not built to scale to millions or billions of transactions a day, it was built as an experiment and it was successful, but the tech is obsolete and you can keep putting bandaids and patching it up, but at the end of the day, it will break apart, bitcoin needs major tech upgrades to compete on the 2018 crypto space and i just don't see the dev team changing course.

Well I do disagree with the you saying that LN is centralized, I do see that adoption of LN if it like segwit will be a pain. However even Eth and many other coins know it will have to use some type of LN. I guess using idea that bitcoin is a experiment then LN will be the second experiment that bitcoin pioneers. For your upgrade what kind of upgrade do you mean-also every coin uses the same tech as bitcoin just in diff ways. None of these scaling plans efficiently and effectively have been added to coins yet. None of these scaling plans are bandages-segwit and schorr is the bandaid used in bitcoin. For the LN to work mainstream a blocksize will need to happen. But what i mentioned if done right will bring bitcoin to the Dapp wars and 2018 crypto space

Its a pretty long read but if you have the time, i base my opinion on the lightning network being a centralized entity on this article: Mathematical Proof That the Lightning Network Cannot Be a Decentralized Bitcoin Scaling Solution...

I'm not sure what sort of improvements could be made to bitcoin or ethereum under their current circumstances and i believe it is because the proof-of-work algorithms have reached their maximum capacity and need a big revision... Vitalik is aware of that and is slowly transitioning eth into a proof-of-stake system.

Not even a POS system is a change from bitcoin tech it just a change in how fast blocks are made. POW can have the same level of blocks using the ghost protocol so no that is not how eth is scaling. Eth plans on scaling by sharding , LN and sidechains. Now for a counter on the post you gave me?:
https://medium.com/@noahruderman/a-response-to-jonald-fyookballs-article-mathematical-proof-that-the-lightning-network-cannot-be-a-5faadecab5c5
I read/saw the post you gave some many times I got tired of seeing that.
Also even more incorrect the LN has improved way more than made in whitepaper that it scales and more DOS resistant then ever. Alos he assumes that LN is run on full nodes-wrong. The LN can be made so light you only need to download the LN part on your phone to use it. Bitcoin dev even went further and added pruning in the bitcoin core nodes to make it easier to run nodes. With phones now able to run LN the capacity of the LN is further increased. Also the LN will as i stated to be made more mainstream will need bigger blocks on the main chain. Mast will further make the LN lighter The watchtower part of LN is now weakened with the Eltoo proposal thus allowing more nodes to be watchtower lowering centralization risks.
The LN today is diff what was proposed. As time goes on the LN will be made to be more decentralized. However if the LN is ready for mass use and bitcoin still did not add big blocks well a huge % of the community will be mad and leave. 10 mb is the min max we want in the future.
Also a stimulation has been done on an old LN tech:
https://hackernoon.com/simulating-a-decentralized-lightning-network-with-10-million-users-9a8b5930fa7a
With more LN nodes from phones,pruned nodes and full Nodes running LN better LN tech the scaling will be greater

Thanks you shed some light on certain pieces of information I didn't have, to be honest, at some point I discarded the LN because I felt it was not possible to work around it but I was not aware of the recent developments it had and those simulations look pretty tasty.

I guess we just need to wait and see how it works in tyre real world and cross our fingers for a more successful adoption speed than what segwit had.

I do agree while the LN has been proven to work now-only the real world can prove it. I am betting money that LN will work but the biggest barrier will be adoption. If segwit took 1 year to go 30% i am afraid of the LN adoption rate. FYI: Roger Ver loves the LN but he wants huge blocks- I mean huge which won't work on the LN. I shall make a post one of these days on why it won't work on big block chain aka BCH. But Ver was wrong in one part he said it would take the LN to 2020 to be made from theory to product guess he was wrong there :)

Interesting article about all the scaling solutions available ;)

Thanks :)

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Thx for the education! Learning a lot from these posts!

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