Tipping the Scales: Could Unit-e Finally Break Blockchain’s Scalability Impasse?
Amidst a seemingly abiding stream of new concepts claiming to be key to crypto to breaking through to the financial mainstream, one immovable issue remains ever-present: scalability. The crypto community is abuzz with new projects relating to the result, from the Bitcoin (BTC) Lightning Network to a brand new cryptocurrency designed past some of the top names in crypto and American academia. Cointelegraph takes a await at the latest scalability developments and what they can bring to blockchain and crypto.
Some of the Usa' finest academic and technological have come together in a new projection aiming to launch a globally scalable decentralized payment network, co-ordinate to a printing release published on Jan.17.
The brainchild of this group of tech professionals and leading American academics is called "Unit-e," a new cryptocurrency that aims to end the scalability issues plaguing both blockchain and cryptocurrencies alike. Unit-eastward is receiving funding from Distributed Technologies Research (DTR), a nonprofit system based in Zug, the cardinal nexus of Switzerland'south and so-called Crypto Valley. In improver to the newly launched DTR, Unit-eastward has also received an injection of funds from San Francisco-based Pantera Capital letter.
Every bit per the press release, the core members of the squad involved in developing Unit of measurement-e are based in Berlin, with the team largely consisting of "open-source and distributed systems engineers."
DTR Foundation Council Member and Co-Chief Investment Officer at Pantera Capital Joey Krug acknowledged that, although the current applied science represents a stumbling cake for the adoption of cryptocurrencies on a wider scale, Unit-e is enlightened of this and is incorporating that knowledge into its research:
"A lack of scalability is belongings back cryptocurrency adoption. The Unit-due east developers are turning this enquiry into real scalable performance that will do good a huge swath of decentralized financial applications."
Giulia Fanti, i of DTR's atomic number 82 researchers and assistant professor of electrical and computer engineering at Carnegie Mellon University, explained to Cointelegraph why scalability is important and what this projection is doing to tackle it:
"Scalability is difficult to tackle in part because there are so many moving parts in blockchain systems. The ideal blueprint should have low storage, computation, and communication costs, all while guaranteeing security and decentralization. Any of these requirements alone can exist challenging to optimize, and the combination of these requirements is legitimately a very difficult trouble.
"I retrieve 2 key factors make our projection interesting: The first is that we are doing research at all levels of the stack, ranging from the network to consensus to economics, instead of focusing on just one area. This is important because the subsystems of blockchains are very interconnected. The second factor is that we didn't limit ourselves to people who already work on blockchains. Instead, we brought in experts from areas that are disquisitional to blockchains – east.g., networking, economics, data theory, distributed systems – and asked them to arroyo these bug using the expertise of their respective fields."
Pramod Viswanath, a researcher for DTR and professor of electric and computer technology at the University of Illinois Urbana-Champaign also spoke to Cointelegraph about how scalability has been an issue in the early stages of any engineering science:
"Global scalability is usually quite hard for whatsoever applied science. As an example, consider cellular wireless systems. Every man, woman and child on World has ane now. Merely wireless technology itself is non new at all. Marconi demonstrated a wireless advice link across the Atlantic Sea in 1901 and it took 100+ years for the applied science to really calibration globally. Information technology took huge innovations across Marconi's applied science for wireless to scale globally. A large part of this innovation was system or total stack design, redesigning all aspects of the radio stacks.
"Bitcoin is the equivalent of Marconi'southward historic wireless transmission: Bitcoin demonstrated that secure distributed trust is possible. Just information technology came at the cost of poor performance (throughput, latency). We are redesigning the total stack of cryptocurrencies in our quest at the getting global scalability."
During the interview, Viswanath said that he was enlightened of the tendency for projects that claim that they are a one-trick fix for the many bug bogging down the crypto and blockchain sectors. As a result, Viswanath stated that their project was kept quiet until solid research could exist presented, in the hope that scientific output could form the basis of Unit-e as opposed to mere fantasy:
"We are aware of the noise in the crypto community. This is why nosotros took a very bourgeois approach. We take been in stealth mode for over a year, coming out in the open merely when we found that we have already demonstrated a large bit of the claims/promises that Unit-e is making. Indeed, the standard 'white paper' in crypto projects is replaced in our case past a '150+ page research manifesto,' which itself is a succinct summary of x+ enquiry papers by united states in the by yr, each written for a scientific audience in the appropriate level of technology and mathematical formalization. These scientific outputs are actually the basis behind the claims of Unit of measurement-e, not so much as wishful thinking."
In spite of the myriad challenges the hitherto insurmountable upshot of scalability has presented, Fanti is optimistic virtually the progress being made and believes that developers shouldn't shy away from experimentation in their research:
"I recollect scalability is a very important result to solve if cryptocurrencies and blockchains more than generally are going to proceeds (or even go along) traction. We're now at the point where there is demand for these technologies, simply the growing pains are starting to be evident. So it'south disquisitional to explore scalability solutions. At the same time, it can exist difficult to experiment with drastically new scalability solutions in already-existing systems due to technical and political inertia. Considering of this, we felt in that location were some clear benefits to edifice a standalone system with the flexibility to try out different ideas. The hope is that these ideas can eventually benefit the whole community."
Babak Dastmaltschi, chairman of the DTR Foundation Council is bullish on blockchain and cryptocurrencies. Much similar Viswanath, Dastmaltschi expressed his belief that this transitional era for cryptocurrency is non unlike the birth of the telecommunications industry and the dawn of the internet:
"The blockchain and digital currency markets are at an interesting crossroads, reminiscent of the inflection points reached when industries such as telecom and the internet were coming of age. These are transformative times. Nosotros are nearing the signal where every person in the world is connected together. Advancements in distributed technologies will enable open networks, avoiding the need for centralized authorities. DTR was formed with the goal of enabling and supporting this revolution, and it is in this vein that we unveil Unit-eastward."
Fanti commented that one of the most encouraging things most the blockchain community is the readiness for cooperation among its members. In this mode, those working on Unit-east accept been able to learn from previous projects attempting to tackle scalability, such as the Bitcoin Lightning Network. Fanti outlined that, although both projects center around the same focal indicate, at that place are some key differences between the ii:
"Like the Lightning network, we are very focused on scalability. I think i key difference is that because we are starting from scratch, we have the freedom to completely rethink other parts of the blockchain (due east.g., consensus mechanisms) that are difficult to change in more than established systems. That existence said, some of our inquiry is quite related to scalability of the Lightning network, and payment channel networks in full general.
"Some scalability challenges in payment channel networks haven't actually come to a head yet, in role because adoption is still growing. Merely once these technologies become more widely used, it will become increasingly of import to understand how to road and schedule packets – much like the internet. We promise that some of the inquiry going on for Unit-due east can too benefit the Lightning Network and other projects in the payment channel network infinite, just equally we are learning from their prior work."
Lightning Network
On December. 23, BTC statistics website Bitcoinvisuals.com announced that the capacity of the Bitcoin Lightning Network surpassed $two million. Built-in from a white paper first published in 2022 past Joseph Poon and Thaddeus Dryja, the BTC Lightning Network is a second-layer payment protocol that functions on acme of the BTC blockchain.
Much like Unit-e, the network aims to tackle the scalability bug weighing down the crypto sector. Withal, as opposed to adapting the mechanics of the blockchain itself, the BTC Lightning Network seeks to increase transaction speed by using payment channels. The results of this approach help speed up transaction speeds between users because transactions are not recorded on the blockchain until the channel closes.
The news of the increase in the network's capacity comes against the backdrop of a dismal menstruation of decreasing crypto prices, famously dubbed the "crypto winter." In spite of the vertiginous drops witnessed across the crypto sector throughout the 2022, the network managed to maintain strong growth.
In spite of being lauded for its efforts to reduce the transaction time between users, the network has attracted criticism for i major aspect: Although the transactions take place on top of the blockchain, they don't relish the aforementioned level of security. As a outcome, it'southward unlikely that the method will result in the transfer of big transactions, as these would need the backup of decentralized security that can be guaranteed only through the original blockchain layer.
As of December. 23, the capacity of node channels supporting the Lightning scaling protocol was 496.eight BTC, only just falling curt of a landmark 500 BTC. December too witnessed an increase in channels connecting nodes, with 14,352 unique channels doing and then by late December.
The Lightning Network too drew praise from crypto trailblazer Nick Szabo who said that the current land of technical development in the sector would lead to an uptick in 2nd-layer solutions in 2022.
Major central bank institution casts doubtfulness on potential of blockchain in electric current state
A new report published on January. 21 past the Bank for International Settlement (BIS) has plant that Bitcoin's problems are only solvable by moving on from a proof-of-work (Pw) organization. BIS is a Swiss-based organisation comprised of 60 fundamental banks that reportedly account for 95 percent of global GDP.
According to the report, the nature of the blockchain infrastructure will result in a steady increase in transaction times as a event of only a limited number of new Bitcoin e'er being created. This report as well found that transaction fees would no longer be able to support mining expenses and that the transaction speeds would be so wearisome that the network could get almost unusable:
"Simple calculations suggest that once block rewards are zippo, it could take months earlier a Bitcoin payment is terminal, unless new technologies are deployed to speed up payment finality."
The written report comments favorably on solutions such equally the BTC Lightning Network, stating that "The just key remedy would be to depart from proof-of-work." The report adds however, that a difference from the existing organization would "probably crave some grade of social coordination or institutionalization, and concludes that "in the digital age too, good money is likely to remain a social construct rather than a purely technological one."
MIT professor says blockchain must increase scalability
On Jan. 21, Massachusetts Constitute of Applied science (MIT) professor Silvio Micali became the latest U.S.-based academic to outline which major aspects of blockchain systems must exist improved in order to maximize all the benefits that the applied science entails.
In an interview with Bloomberg, Micali stated his view that security, decentralization and scalability are three core aspects of blockchain systems that must function simultaneously in order to evangelize an inclusive and borderless economy. With regard to scalability, Micali emphasized that a decentralized system requires a higher level of applied science in gild to ensure the same degree of participation that centralized systems currently enjoy.
Micali outlined his optimism about future prospects for the technology one time it is optimized to a degree to which the current issues regarding scalability and security can finally be dispelled:
"Only a true decentralized system, where the power is really and so spread that is going to be essentially practically impossible to attack them all and when you don't need to trust this or that detail node, is going to bring really the security we really need and deserve."
In January, MIT Technology Review furthered its bullish stance in challenge that 2022 would exist the year that blockchain systems would finally savor normalization and wider adoption.
Liquid sidechain
In September, Blocksteam'southward Liquid Network sidechain for the Bitcoin blockchain was publicly announced. First discussed in 2022, the project has now been launched with the view of improving liquidity betwixt Bitcoin exchanges and brokers.
The blog post from Blockstream states that the Liquid sidechain would allow faster transactions between users as a result of a native Liquid Bitcoin (L-BTC) nugget backed by a "two-mode peg" to Bitcoin, Confidential Transaction Technology and Issued Avails that aim to bring "Bitcoin-like features to traditional avails." The Liquid Network FAQ page explains that the Liquid Network differs from the Lightning Network in that its transactions are non "limited in corporeality of aqueduct capacity."
"Wall Street'south Bookkeeper" enters test phase of DLT replatforming
On November. 6, the Depository Trust & Clearing Corporation (DTCC) announced it had commenced the exam stage of its attempt to replatform its Trade Information Warehouse (TIW) using distributed ledger applied science (DLT). The projection is the fruit of a collaboration betwixt IBM, Axonia and R3. If successful, the project would correspond a considerable leap forward in both scalability and the potential scope of major blockchain projects.
In calorie-free of the historic attempts to overcome scalability issues, the DTCC's try to shift its TIW to the blockchain is especially ambitious due to the fact that it processes 98 percent of derivatives transactions worldwide. Furthermore, the statement adds that the DTCC's subsidiaries "processed securities is valued at more the U.Southward. $i.61 quadrillion." As per the release, the DTCC'south Global Merchandise Repository service candy around 40 meg over the counter (OTC) positions weekly, along with 1 billion monthly communications via its licensed trade repositories group.
In a nineteen-week study headed past the DTCC in collaboration with both Accenture and R3, the trio institute that DLT is scalable plenty to back up the high-trade volumes of the U.S. equities market. Findings in the written report allegedly show that DLT is able to process an unabridged trading twenty-four hour period's volume at peak rates, amounting to 115,000,000 daily trades, which equates to roughly six,300 trades per second for 5 hours on end.
In order to accurately recreate the chaotic environs of exchanges, brokers-dealers and market participants, Accenture worked on a network of more than 170 nodes. The model later on captured matched equities trades from exchange DLT nodes.
The DTCC besides published information near the ongoing work to transform its TIW via DLT, such as blockchain:
"Currently, public blockchains supporting cryptocurrencies operate at single or double digit per 2d performance, which, until at present, was the only indication of the potential volume that a private DLT might be able to support.
"To brand sure that we really demonstrated robustness and completeness, we wanted a target high enough to measure the performance and allow it to maintain that for a continuous catamenia of time."
Jennifer Peve, director of business development and fintech strategy at DTCC, outlined that the scale of the project required an entirely new arroyo to scalability:
"The reality is that for the private distributed ledger, there wasn't a known performance or scalability figure, all we had to go on was public blockchains for Bitcoin performance, and that is not an apple-to-apple comparing. Individual blockchains are fit for purpose for our industry. They have a very dissimilar compages, different privacy and sharing models, data storage, smart contract functionality and governance model. In that location are a number of factors that go into operation and scalability of a distributed ledger."
Caput of Immigration Agency Services at DTCC Murray Pozmanter was likewise optimistic about the results of the ambitious efforts to create adequate scalability:
"Nosotros are excited to atomic number 82 this important work to advance the operation capabilities of DLT and help create new possibilities for leveraging the applied science more broadly beyond financial markets. As an early adopter of DLT, we are encouraged by the results of the study because they prove that the applied science's performance can scale to see the needs of markets of different sizes and maturity."
In spite of the successful testing so far, the group stresses that the study only tested basic functionality. The next phase of the replatforming is expected to take identify in Q1 2022.
Source: https://cointelegraph.com/news/tipping-the-scales-could-unit-e-finally-break-blockchains-scalability-impasse
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