Layer one scaling techniques are used to increase transaction throughput. Transaction throughput can be increased by speeding up transaction processing or increasing the amount of data processed in each block. Sharding and consensus protocol enhancement are two popular approaches to cryptocurrency protocol improvement.
1. Sharding
Sharding is the process of dividing blockchain data into fractions that can handle transactions and requests independently. Shards are the individual fractions of data that are broken down. Every shard has its block and node that runs concurrently with other shards.
Thus, sharding is analogous to creating multiple pathways for data flow on the blockchain. Consider a road with a single lane and heavy traffic. The road will be less congested, and vehicles will arrive at their destinations faster if multiple lanes are built in the same direction. That is exactly what sharding does. Sharding is similar to creating multiple lanes for data transmission on the blockchain. The pathways are designed to increase the number of transactions processed on the blockchain simultaneously.
Individual nodes do not need to keep a complete copy of the base chain when sharding is used. Only a tiny percentage is required to verify the transactions. Individual nodes send the transaction report to the main chain for verification once the transaction is complete.
The Zilliqa network, which has applications in machine learning and data-driven academic research, is currently using sharding to boost the throughput of its blockchain. Zilliqa’s sharding framework can support up to 25 different shards that concurrently process transactions on the blockchain. Thus, with sharding, blockchain transactions and data transmission can be 25 times faster than usual.
Sharding is currently being tested on another layer one blockchains such as Cardano and Ethereum. The concept is still in its early stages in the blockchain ecosystem, and developers are still scrutinizing it for potential flaws before implementing it on the mainnet.
2. Consensus Protocol Improvement
There are various blockchain consensus mechanisms available. The most common consensus mechanisms, however, are Proof-of-Work (PoW) and Proof-of-Stake (PoS). The Proof-of-Stake mechanism requires network contributors to stake tokens in liquidity pools for transaction validation.
The main advantage of the PoS model over the PoW model is that it requires far less energy for validation. Furthermore, blockchains based on the Proof-of-Stake consensus model are more scalable and faster than Proof-of-Work models.
To improve the blockchain, the consensus protocol of a layer one blockchain can be changed. Ethereum is currently undergoing protocol enhancements. The release of ETH 2.0, which will be a transition from the Proof-of-Work to the Proof-of-Stake model, will significantly increase the Ethereum network’s throughput.
Blockchain developers estimate that the upgrade to Ethereum 2.0 will allow transactions to be processed at a rate of 100,000 TPS, up from the current 30 TPS. If this goal is met, we can expect more people to use the Ethereum blockchain for transactions and dApp development.
Conclusion
Layer one blockchains are analogous to a building’s foundation. They serve as the foundation for layer two blockchains. Popular approaches to cryptocurrency protocol improvement are discussed in this guest article. Contact SmartOSC if you want to get information about blockchain development services.
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