The Scalability Problem in the Blockchain and the Solution
The blockchain is a revolution in the world of banking and has the potential to completely sideline the traditional banking system. The technology is in its initial stage as of now. The existing blockchain system, however, has a few problems which limit its usability. These problems include lower transaction speed, higher transaction costs, scalability, and too complicated system for cross-chain transfers. These aforementioned problems make the blockchain less viable for mass adoption. An extensive research is going on to remove these limitations and QuickX has managed to find some really good and feasible solutions.
Why is scalability a problem for the blockchains?
All blockchains including Bitcoin, Ethereum, Ripple, etc. have one major problem of scalability. We know that on the blockchain, each node is required to process every transaction. This is important to keep the process transparent. Further, it also has advantages such as no need for the intermediaries, security, and permanence.
Nevertheless, this also gives rise to the need for each node to keep and maintain a copy of the entire ledger. This means each node on the blockchain must have enough physical storage to store the data. In traditional database systems, this problem can be very easily dealt with by adding more physical server computers. But since blockchain is a decentralized system, here adding physical components at each node to increase its processing power is impractical.
Expansion of blockchain will increase the need for better processing power, bandwidth, and storage at each node. It is possible that not all nodes may be able to meet these requirements.
How QuickX offers to solve this?
The QuickX protocol offers a solution to this problem by developing a decentralized platform with transactions that will take place off-chain will the help of pooling facilitators. This makes the process more efficient and the change is registered on-chain only after the transactions has taken effect.
How does it work?
Currently, if a user wants to transfer cryptocurrency to another user, they are required to wait until the transaction is confirmed by the blockchain. Everything that happens in this transfer process appears on the blockchain and therefore, increases the amount of data to be stored on the blockchain. However, the proposed solution by QuickX to this problem is as follows:
Both the users enter an amount to open a channel or a ‘common fund’ which is handled off-chain.
They make transfers to each other from this common pool; everything is done off-chain and therefore, doesn’t appear on the blockchain and is not required to be written on the blocks.
Once the transaction is complete, it is registered on-chain.
This above-outlined process takes place instantaneously just akin to the traditional electronic payment system. It effectively solves the problems of scalability and cost that the existing blockchain systems are facing. The off-chain order book is maintained by transaction facilitators, and the cost of maintaining is almost negligible. Like the traditional systems, the proposed model provides seamless and instant transfer of cryptocurrencies between two parties.
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