Crypto Academy Week 15 - Homework Post for @alphafx Scalability of blockchains

I was never that much empowered with the crypto world before joining this amazing world of the crypto academy. Every week gaining some interesting information from different professors here. This week's lesson by prof -alphafx helped me to understand the scalability of blockchains. Here is my assignment after going through the lesson.

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###Task 1

Make a transaction on the Binance smart Chain and Tron blockchain (you can use any token)

Transaction on Tron Blockchain

For this transaction, I am using TronLink wallet which is already installed as an extension in my chrome.

• Logged in to my TronLink wallet, there are about 111 TRX in my wallet out of which 100 is frozen so only 11 is available for a transaction. I will send 10 TRX to another wallet (Trust wallet).

• Filled the required information
  
  

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• Clicked on send and confirmed the transaction
• Transaction done at 11:38

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• TRX received in my trust wallet just after a minute at 11:39

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Transaction on Binance Smart chain

For this transaction, I am using Trust wallet. It is already installed on my mobile phone. I just have to open and make the transaction.

• I have 10 TRX out of which 9 I transferred to TronLink wallet.
  
  

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Task 2

Show the time taken for each transaction to be verified (original screenshots must be included)

Time taken for Tran blockchain on TronScan TronLink Wallet

I checked the exact time in tronscan

Transaction initiated at 11:38:09

Transaction completed at 11:39:24

So total time taken to complete the transaction was 1 minute and 15 seconds

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Time taken for Transaction on Binance chain through Trust Wallet

Time checked on tronscan

Transaction initiated at 18:34:57 and completed at 18:34:58

Here transaction was lightning fast i.e. completed within second.

Binance chain transactions are faster than Tron Blockchain Transactions.

Task 3

Compare the scalability and speed of the two against BTC

As I have done transaction on Tron and Binance chain, both are much faster than transaction on
Bitcoin.

Scalability and speed of Bitcoin

It is a well-known fact that Bitcoin has a scalability problem and it is due to the limited capability of the Bitcoin network to handle large amounts of transaction data on its platform in a short span of time.

Bitcoin's block creation time is 10 minutes, the block size is 1 megabyte and can handle only 5 transactions per second.
If block creation time reduced it cause a stability problem and if block size increases it will require high computing power and mining of bitcoin will be more difficult and only miners who have high resources could mine the bitcoin. It is due to its Proof of work consensus algorithm.

To scale up bitcoin to a global level it required to increase its block size 10000x from the current level, which is not at all practical.

Scalability and speed of Tron blockchain and Binance smart chain

Tron

In case of Tron blockchain block generation time is 3 second and validation of a transaction required 20 block so average time for a transaction is about 1 minute, same as shown in the real-time transaction done in the above task.

Unlike Bitcoin Tron blockchain works on Delegated Proof of Stake DPoS which doesn't required heavy computing power so it is far faster than Bitcoin.

Tron is a software, its code can be modified with better algorithms and the network then upgrades to the more advanced version so it is a highly scaleable.

Binance Smart Chain

With 3 seconds block creation time it works on consensus model called Proof of Stake Authority where participants stake BNB to become validators. It is a hybrid fo Proof of Authority and Delegated Proof of Stake.

As in real time transaction done in the above task it is lightning fast as compare to bitcoin. my transaction was completed within seconds.

Unlike Bitcoin’s Proof-of-Work (PoW) consensus mechanism, Binance Smart Chain’s PoSA algorithm is highly efficient as it doesn’t require miners energy-intensive physical equipment to solve complex mathematical puzzles.

Here in BSC validation is done by only 21 validators to reach consensus who stake the BNB token.

Due to such a limited number of validators required in the network, it is highly scalable with fast throughput.

Comparision in a nutshell

S No	Block Chain	Consenses Algorithm	Transaction Time	Transaction Speed	Scaleability
1	Bitcoin	PoW	10 minutes	~5 Trans/sec	Very limited
2	Tron	DPoS	1 minute	~2000 Trans/sec	High
3	Binance SC	PoSA	Few seconds to minute	~3500 Tran/sec	High

Task 4

What do you think can be done to improve the scalability of these three (BTC, Tron, Binance Smart Chain)

Scaleability solution of Bitcoin

Userbase of Bitcoin has grown many fold in last 10 years but still it is not able to handle transaction faster as compare to centralize banking system and other newly developed centralize blockchains. It means Bitcoin is not scaleable to fulfill the needs of its growing userbase.

There are several efforts has been done to scaleup but still needs to find a suitable solution ofscaleability problem. I think some proposed solution can solve the sacleability problems to some extend.

Lightning Network

This is an innovating technology to solve the scalability of blockchain. In this process transaction not happened on the main blockchain but a sidechain is created and transaction completed on that and later it is recorded on main chain. This another layer of main chain provides participants an opportunity to build payment channel between them which makes transaction fast and at low cost or at no cost.

To perform transaction a multi sign wallet is created between to parties which can be accessed with their private keys. Once they deposit some equal amount in that wallet an unlimited transaction can be done in a fast, free and secure way. When wallet is closed money is distributed between them. After the channel work completed, the data is submitted to the main chain.

This is very useful for micropayments.

Plasma Cash

This is somewhat similar to Lightning Network. A new layer or side chain is created to perform the transactions and decentralize apps can be run on this layer. This technology solve the scaleability problem as billions of transaction can be process in a second.

This side chain constantly send datas to the root chain whitout clogging the main chain. All side chains have own validators and can issue their own tokens.

Conclusion

No doubt that blockchains have their own scaleability problems. The main issues of scaleability are block size, block creation time and transaction fee. To solve this problems so many new ways have been discovered like Harf fork, Soft Fork, Layer System(side chain), Plasma Cash etc.
I am thankful to the Professor @alphafx for this brainstroming and interesting session about blockchain scaleability problems. It helped me a lot to understand the issue in details.

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