Blockchain technology has the potential to change the world and disrupt numerous industries with its positive features like increased security, transparency, traceability, and decentralization.
Cryptocurrencies are one great example of the possible use-cases of blockchain technology. They allow us to send and receive inexpensive transactions anywhere in the world in 24/7/365, ignoring the bank holidays, slow processing times, and costly fees of the traditional financial world.
But the blockchain’s use-cases do not stop at cryptocurrencies. Among others, the tech is actively explored for identity, voting, banking, fundraising, food safety, and even for energy market solutions.
Blockchain’s Limitations Hinder Its Adoption
However, blockchains are facing a significant problem that hinders the tech’s adoption rate. And this is scalability. While traditional financial services – such as Visa, MasterCard, and PayPal – are capable of processing thousands of transactions per second (Tx/s), most cryptocurrencies struggle to scale their blockchains over 20-30 Tx/s. Due to these limitations, blockchain in its current state is not fit for enterprise use as many companies fear that the network they join will easily become congested, resulting in unreasonably expensive transactions and transaction processing times taking days.
Bitcoin is a great example of this with its block size limit of 1-2 MB. During one of the largest bull runs in the cryptocurrency’s history in January 2018, the average confirmation time in the Bitcoin network took nearly eight days with the average cost of a transaction being as much as $143. In the business world, no one can allow to offer customers a payment method that keeps them waiting for over a week. Furthermore – unless someone is sending tens of thousands of dollars, – paying $100+ for transaction fees is not beneficial for anyone (apart from the miners).
We Need Bigger Blocks On-Chain, But Not Via One-Layer Scaling
The solution to the blockchain scalability problem is to increase the capabilities of a network to effectively handle bigger blocks. Increasing the block size limit of a blockchain will allow its network to process more transactions per second. Therefore, it will be increasingly fit to replace traditional financial services and satisfy both B2B and B2C demands.
However, many in the blockchain space take the wrong approach to scaling and seek to increase their networks’ block size limits on-chain, utilizing only one layer for scaling. While using a one-layer on-chain scaling solution might seem like a fast and convenient way to increase the transaction handling capabilities of a blockchain, the side effects of such solutions can cause even bigger issues than the blockchain scalability problem itself.
Bitcoin SV (BSV) – a fork of the Bitcoin Cash (BCH) blockchain – has decided to go with this method, massively increasing its already substantial block size limit of 128 MB to 2 GB. According to a report, BSV’s first layer scaling solution faces multiple problems due to the massive block size limit increase, which includes possible data dump scenarios, increased centralization due to full nodes becoming too expensive to run for the “average” miner, as well as block propagation issues.
Therefore, Bitcoin SV’s example proves once again that one-layer on-chain scaling is not a viable solution for blockchain projects.
ILCoin’s RIFT Protocol: the Revolutionary Solution to Blockchain Scaling
ILCoin Blockchain Project – an ecosystem featuring the world’s 80th cryptocurrency as well as a hard-working team developing innovative tech – has identified the issues with the current one-layer on-chain scaling methods in the industry and presented its own, revolutionary solution to the blockchain scalability problem.
This solution is the upcoming RIFT Protocol that features a two-layer blockchain. The first layer consists of mineable blocks, while non-mineable Mini-Blocks containing transactions are present on the second layer. Standard blocks have references to the Mini-Blocks while Mini-Blocks have references to transactions.
On top of this, Mini-Blocks sync asynchronously with standard blocks. This allows blocks to be synced simultaneously with other blocks. Therefore, large amounts of data can be stored on the blockchain without losing in terms of efficiency, as blocks in the network sync significantly faster than in other on-chain storage solutions. The elegant and revolutionary structure of the RIFT Protocol allows for a stable block size up to 1.5 GB that comes with potentially unlimited network size and without the side effects of single-layer on-chain scaling solutions.
In addition to a block generation frequency once every 5 minutes, RIFT Protocol has massive transaction handling capabilities such as 33,888 Tx/s. It takes ILCoin’s blockchain tech to the next level and efficiently solves the industry’s scalability problem.
ILCoin also identified that blockchain technology can be efficiently used for solutions other than solely cryptocurrencies. The project is working on its Decentralized Cloud Blockchain (DCB) that will satisfy the needs of numerous B2B and B2C demands, including secure data storage solutions in a fully encrypted environment.
This is a submitted sponsored story. CCN urges readers to conduct their own research with due diligence into the company, product or service mentioned in the content above.