Scaling, in terms of blockchain networks, is different from simple growth terms. All blockchain systems wish to grow their userbase and adoption, where growth simply means the increase in users and utility. But with this ability to grow is also the ability to increase capacity to perform the same functions at the same efficiency, at an increased frequency. This is the scaling we refer to in the industry.
And in blockchain, scaling is an old problem that continues to be at the heart of every huge dilemma facing major blockchain projects today.
How scaling threatened Bitcoin and Ethereum
Bitcoin’s proof-of-work (PoW) system can be described as “the longest chain wins” in terms of identifying the accepted network state, and with an estimated hashrate of almost 110 exa hashes per second (110 Eh/s or 110,000,000,000,000,000,000 hashes ever second) now dedicated to it, it is by some distance the most secured blockchain network in existence.
Let’s put that into perspective. An iPhone X is able to provide a maximum of 65 H/s. So to beat the current Bitcoin difficulty, you would need almost 2 QUINTILLION iPhones. It’s easy to imagine that no single entity feasibly being able to defeat it due to the vast computing power behind it.
But PoW, apart from its inherent waste of resources (globally, now consuming more electricity than Switzerland’s entire consumption), presents a scalability problem that mainly was caused by its 1 MB block limit (limiting the data that can be stored in every block). As transactions reached a queue of up to 200,000 in 2017 at the peak of the crypto rally that year, and fees spiked to even $100 (either that, or wait days for your transaction to confirm), it became very clear that Bitcoin could not handle increased demand at roughly 5 transactions per second (TPS).
This caused a massive split in the Bitcoin community, with one faction arguing for larger blocks and eventually forking off to create their own blockchain. Bitcoin itself eventually had to introduce upgrades like Segregated Witness that led to smaller transaction sizes, helping to make the 1 MB blocks more efficient. Current work is now focusing on an off-chain second layer solution Lightning Network which proposes instant confirmations at lower fee, with the caveat that transactions remain off-chain until the second-layer channel closes.
Not the ideal solution for everyone, until today, both SegWit and Lightning are being opposed, and Bitcoin continues to have a limited TPS.
Ethereum’s rise due to decentralized applications (DAPPs) in 2017 also led to the same problem and, more recently, the popularity of Decentralized Finance apps (Defi) on Ethereum have also clogged the blockchain, causing fees to spike as smart contracts guzzled down Ether and competed for node validation.
Ethereum is now seeking to move to a completely different consensus mechanism, from PoW to Proof-of-Stake (PoS), almost entirely because of this scalability issue.
So why not just solve the problems with increasing capacity?
Simple implementations suggest that just increasing TPS by increasing block sizes or reducing block times won’t work because only full nodes are secure (those that have the entire copies of the blockchain). Increasing block sizes or reducing block times would increase the size of the entire blockchain quickly, making it more and more difficult to be a full node.
Decentralized networks rely on having as many nodes as possible, to reduce the likelihood of the network being controlled by colluding entities.
BOSAGORA’s approach
In one of our blog posts, we described in great length about BOSAGORA’s unique consensus mechanism in the shape of modified Federated Byzantium Agreement (mFBA). One of the beneficial features of FBA, in comparison to the traditional Byzantium Agreement consensus is that it improves the networks ability to scale.
Roughly put, BOSAGORA has moved in the path of Bitcoin: choosing to build a second layer (L2 or Flash Layer) on top of our Layer 1 (L1 or Settlement Layer), but with rules that are slightly weaker.
Practically, instead of having every computer on the network execute the same script, Layer 2 involves an implementation by only the computers involved in the transaction, but achieving similar security protections as with on-chain transactions, using the blockchain itself (the Layer 1) as an anchor of trust.
It is an effort to balance the security of L1 settlement, while allowing for transactions to be accepted by peers without the need to record them on L1 and to relay them to all nodes. But to incentivize nodes to accept these L2 transactions, we have to modify the incentives and make it attractive for them.
To summarize the savings on the time and cost efficiency, as well as space, while protecting the integrity of the network, our implementation of a Flash Layer would result in:
- Less blockchain bloat
- Near-instant confirmations for the right protocols without waiting for blocks
- The ability for micro-transactions and near zero fees
This immediately overcomes the problems Dapp developers now face on Ethereum, where every smart contract can cost gas fees and every user interaction carries an unbearable gas cost.
Also significant to BOSAGORA is that this Flash Layer helps in the separation of the political and the economic power that users will have — this is currently a major focus of our work on the development of the platform.
As Bitcoin is currently experiencing with Layer 2, and as is Ethereum 2.0, there is still much work to be done when exploring Layer 2 solutions. The early technology will be buggy and there are many aspects of security and trust that must be worked out when we move computing activity from individual transactions and smart contracts away from the on-chain layer, it is important that we figure out the best way to achieve the best of both worlds.
We will be sure to share with you more updates as we are able to!
Please join our communication channels as follows!
Website(Kor): https://bosagora.io/ko/
Website(Eng): https://bosagora.io
Telegram(Kor): https://t.me/bosagora_korea
Telegram(Eng): https://t.me/bosagora_eng
Telegram Spanish: https://t.me/bosagora_es
Telegram Russian: https://t.me/bosagora_ru
Telegram Turkish: https://t.me/BosagoraTR
BOSAGORA Official Announcement: https://t.me/boa_announcement
WeChat: Add (ID:wy5854430) as a friend to join
Medium: medium.com/bosagora
Twitter: https://twitter.com/BOSAGORA1
Reddit: https://www.reddit.com/r/BOSAGORA_BOA/
Facebook: https://www.facebook.com/BOSAGORA/
LinkedIn: https://www.linkedin.com/company/bosagora
Youtube: http://bit.ly/2YFpd5r
Github: https://github.com/bosagora/
BOSAGORA TEAM
