Scalability has been the hottest topic in the crypto space over the last half a decade.We have seen several projects adopt a centralized stance just to speed up their overall throughput.However, is that really the best way to move forward? Qtum posits that scalability and decentralization may not be as mutually exclusive as one thinks.Before we go any further, let’s take a deeper look at the scalability trilemma.
What Is The Scalability Trilemma? Image Credit The scalability trilemma theorem states that in a network, there is always a trade-off between three properties — decentralization, scalability, and security.So, for a hypothetical triangle connecting these three points, a network can only pick one side of this triangle.In simple terms — a network that emphasizes security and decentralization must sacrifice scalability.Similarly, a network that emphasizes scalability and security must sacrifice decentralization.
Let’s look at this from Bitcoin’s perspective.Satoshi wanted to emphasize decentralization and security, which is why they used the Proof-of-Work (PoW) algorithm.
However, Bitcoin’s throughput is painfully low due to this decision, with 7 transactions per second.
On the other hand, the Visa Network has good security and manages more than 65,000 transactions per second.Why? Because Visa is a centralized network.
Alright, but what about the other fast blockchain platforms? What about 3rd generation blockchain platforms that can allegedly process about 4,000 transactions per second? Well, they are not the most decentralized solutions, are they? They inevitably use a consensus algorithm that uses a form of delegation.
Why is low scalability a major roadblock to adoption? Bitcoin has typically a throughput of 7–10 transactions per second which is very low.Suppose you want to send BTC to your friend.Your transaction will get queued up in a place called the mempool.
The miners then pick up the transactions from the mempool and place them in their blocks.The moment that happens, your transactions go through.
Obviously, during high demand, the mempool tends to get pretty long.In these cases, if you are in a hurry, you can pay extra transaction fees to entice miners and speed up the process.
Unfortunately, this bloats up the overall transaction fees, which don’t bode well for normal everyday users.
Another issue goes beyond your normal “transaction speed” quandary.
Developers need their base layer to be fast enough to support their protocols.After all, you can’t play the latest Halo in a Windows 98.Furthermore, for the overall space to evolve with more complex protocols, it is absolutely essential to have a base layer that is fast and scalable enough actually to accommodate these protocols.
Decentralization vs.Speed Now we come back to the old question of decentralization vs speed.Many modern protocols tend to compromise decentralization for speed.They usually neglect the egalitarian nature of the original Bitcoin design and opt for elected “supernodes” instead.
Reducing the number of governance nodes to a select few make it possible to compensate for an ever-growing network.
However, what if you didn’t need to do that? What if there was a way to increase speed without cutting down on decentralization? This is not a hypothetical question.This equilibrium is exactly what Qtum has successfully achieved.
Qtum Scalability Qtum’s unique ability to adjust blockchain parameters without a hard fork allows scaling to occur as the situation requires.Qtum can handle up to ~1100 transactions per second at its base layer, making it almost 100 times more scalable than Bitcoin.
On top of that, via Segregated Witness, Qtum can increase throughput by 60% via SegWit.
Plus, keep in mind that Qtum has already implemented the Lightning Network — a layer-2 scaling solution — to control the cost of transactions.
However, with its 2021 Fastlane hard fork, Qtum showed every other protocol how to do a layer-1 protocol upgrade without damaging the core principles of decentralization.If you want a detailed study, then check out this blog .If you want a general overview, then continue reading.
Fastlane Aka “How To Scale Up Without Centralizing Your Protocol” In 2021, Qtum went through a “fast lane” hard fork, reducing the block spacing from 128 seconds to 32 seconds.
At the same time, to keep the circulating supply in control, the Qtum block reward was cut down from 4 QTUM to 1 QTUM.
Prior to the hard fork., Qtum found out that their original network had an average orphan block rate of 3%.Orphan blocks are legitimate blocks that didn’t propagate through the network in time and hence didn’t get added to the chain.
Post-fork, Qtum found out that after block space reduction to 32 seconds, the orphan block rate had risen to 20%.While the rate had indeed increased, this still wasn’t enough to cause a major orphan chain split.
The longest orphan split chain length still remained 2 blocks.
Alright, so reducing the block spacing time didn’t adversely affect the orphan block rate.Now came the second phase of the test.Increasing the number of transactions per unit increases the network load, increasing the processing time for each block and subsequently increasing the orphan block rate.
Do keep in mind that Qtum block size is around 2 MB.
To test this, with the 32-second block spacing, Qtum increased the overall transaction load by filling up most of the new blocks close to full load.After doing this, Qtum noted the following stats:
The orphan block rate was stable around 27%.The longest fork length was around 4 blocks.The probability of a fork was at 0.61%.Overall, the results were well within the acceptable parameters.With the Fastlane hard fork, Qtum successfully displayed the correct and most robust way of scaling up your protocol without centralizing your network..
