Crypto scalability refers to a blockchain network being able to scale up in transaction count and number of users while not losing performance, speed, or security. As cryptocurrencies started to be used at large, such as Bitcoin and Ethereum, limitations have risen regarding their original design with reference to processing speed and transaction cost. Scalability is essential with regard to mass adoption of blockchain technology.
In conventional blockchain systems, each node processes and verifies every transaction. This naturally creates bottlenecks as the transaction count goes up. For instance, Bitcoin supports only about 7 TPS, whereas Ethereum supports approximately 30 TPS, which is far from the traditional payment systems like Visa, which can process thousands of TPS.
Scalability solutions are being developed to address such limitations. They include:
Solutions at Layer 2: Off-chain scaling solutions such as the Bitcoin Lightning Network and Ethereum rollups allow the base layer to settle only a portion of the total transactions that have taken place but which are placed off-chain. It reduces the load on the base layer.
Sharding: It refers to the process by which the blockchain is segmented into shards. It permits the parallel processing of all the transactions in the shards. As the number of shards is increased, so will increase the parallel processing capabilities, hence enhancing the TPS further.
Consensus mechanisms are for efficiency: migration from proof of work to more scalable models, such as Proof of Stake, as evidenced by Ethereum 2.0.
Scalability is very much in demand, even necessary if blockchain networks are to find a place in general usage and stand up against traditional financial systems.
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VEIGO (Community Mod)
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