Why blockchains don’t scale

  1. Does the network remain decentralized?
  2. Does the network remain secure?
  3. Will it allow, or at least prepare, the network to scale to levels required for mass adoption?

Increasing the block size

One of the more publicised attempts at scaling surrounds the block size debate which ultimately led to the Bitcoin hard fork of Bitcoin Cash in August 2017. Simply put, by increasing the block size you are able to process more transactions in the same timeframe.

Sharding

Sharding separates the overall blockchain into different shards, with these respective parts spread across different nodes. The easiest way to visualize it is splitting one island into hundred different islands. Each of the islands must still conform to the same rules as before — but they are only responsible for governing their small island, rather than the previous larger unified one.

Offchain state channels

Offchain state channels are a means through which certain blockchain interactions are no longer conducted on the blockchain but rather are conducted ‘offline’. This works by essentially allowing two (or more) participants to lock a part of the blockchain state as a ‘state channel’. These participants can still make changes/transactions between themselves to the state channel in the same manner as usual and then, once they have concluded business, the participants submit the state channel back to the blockchain. The blockchain then updates with the new data and the state is unlocked.

Scaling without centralisation

For blockchains to become widely adopted public networks they need to be able to scale without sacrificing the guiding principle of decentralisation.

  • Horizontally (add more nodes)
  • Vertically (increase the resources to each node)

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Radix DLT — The Decentralized Finance Protocol

Radix DLT — The Decentralized Finance Protocol

The first layer 1 protocol specifically built to serve DeFi