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What is scalability in blockchain and how to improve it?

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What is scalability in blockchain and how to improve it?

What does scalability in blockchain mean? Scalability in blockchain refers to the network’s ability to respond to demand. Scalability must respond to parameters such as: the number of transactions per second (TPS: Transactions Per Second), the volume required to store the blockchain network and the speed of transmission in the network information.

What is scalability in blockchain; along with ways to improve it

This criterion specifies the speed of transactions on the platform of blockchains. The ability of network processing to verify and record transactions, or TPS, is the most important pillar of scalability. The higher the transaction confirmation speed, the better the scalability of the network. To better understand this issue, we analyze the scalability of the Bitcoin network.

What are the obstacles to scalability in blockchain?

The founder of Ethereum, Vitalik Buterin believes; No network can offer all three features of decentralization, security and speed to its users at the same time. He has chosen the name “scalability triangle” for this problem.

Each of the cryptocurrencies based on the Proof of Work (PoW) algorithm sacrifices one of these features in its blockchain network. For example, Bitcoin is completely decentralized and highly secure. But as we mentioned earlier, transactions in the Bitcoin blockchain are slow.

Solutions to improve scalability in blockchain

Increasing the block size Increasing the block size is one of the best and most effective ways to improve TPS in the blockchain. In 2017, the Bitcoin blockchain created a hard fork called Bitcoin Cash in order to increase the block size. This new fork with a block size of 8 MB was able to provide better scalability than Bitcoin.

Increasing the volume of blocks

Increasing the mining reward, the creation of new blocks by miners in the blockchain network is called “mining”. Miners verify transactions by solving complex mathematical equations and receive rewards by adding new blocks to the blockchain.

Increased mining rewards

If the rate of this reward increases in the network, miners have more incentive to confirm transactions. This trend causes the TPS rate of the blockchain to increase as well.

Reducing the volume of network transactions

Reducing the volume of network transactions, the fewer the number of transactions that take place on the blockchain platform, the faster they are confirmed, and the result is an increase in the TPS of the network. Bitcoin has tried to implement this method with the Segway soft fork to improve scalability in the blockchain. Transactions in the Segwit fork occupy about 60% less block size and have lower fees than transactions on the main Bitcoin network. As a result of this volume reduction, more transactions are confirmed in each block and it has a positive effect on scalability.

Factors affecting blockchain performance

Factors affecting blockchain performance

consensus mechanism

A consensus mechanism is a technique or mechanism by which a transaction is published, confirmed and finalized in a blockchain network. This consensus mechanism is also responsible for achieving the right balance between the degree of decentralization, scalability and security that a blockchain network has. Therefore, the choice of consensus mechanism is directly related to how the blockchain network works.

Network latency

In a distributed architecture, network latency is one of the most important factors that affect the overall performance of the network. When a transaction needs to be validated, it needs to be broadcast to all nodes and their responses need to be collected for majority-based consensus. Therefore, having dedicated network bandwidth helps greatly in reducing network delays and improving overall throughput.

Node infrastructure

Blockchain nodes consist of a runtime engine and a database hosted on-premises or in the cloud. In the absence of dedicated infrastructure resources (eg CPU, memory, hard disk), node performance will likely suffer. Therefore, it is essential to provide sufficient infrastructure size and IOPS (input/output operations per second) allocation.

The number of nodes

As the number of nodes increases, the longer it takes for a transaction to propagate and reach consensus, the more its overall performance degrades. Techniques to reduce the communication overhead and allow nodes to rely on the validation history of a leader node or other peer nodes have been introduced to alleviate this problem.

The complexity of smart contracts

Most benchmark studies or claims are based on tests conducted in a controlled laboratory environment for the simplest transactions. As the complexity of smart contracts increases in terms of validation logic and the number of read and write operations from/to the ledger increases, the processing latency also increases, thereby affecting the overall performance.

What is the ultimate cure for scalability?

Although in the article we answered the question of what scalability is and introduced solutions to improve it, in the end we must point out that scalability in blockchain is not a definite amount and is completely a relative issue. To put it more simply, it cannot be said definitively that the Bitcoin network has low scalability or that the Ripple network is highly scalable. Parameters such as time and number of online users have a significant impact on this, and changing each one can change the scalability.