Tag: Sharding

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Crypto Guides

Is EOS A Better Investment Than Ethereum Right Now?

Introduction

Introduction

Introduction

EOS and Ethereum both are popular blockchain smart contract platforms. To know whether EOS is a better investment or Ethereum, we will need to compare the two technologies by exploring basic concepts and comparing their mechanisms to draw out the necessary conclusions. After Ethereum was introduced in the crypto industry, two years later, EOS was launched and claimed to fix the flaws in Ethereum. EOS is a strong, scalable contender and might outperform Ethereum. The battle of EOS vs. Ethereum is the most interesting and happening space in the crypto industry. 

What is Ethereum?

Ethereum is a blockchain platform launched in 2015 by Vitalik Buterin. It allows users to send and receive funds independently without the assistance of any third party. It was the first blockchain project to install the smart technology contract. In this technology, some predefined conditions are applied, and users are needed to justify the conditions to proceed with transactions without the need for an intermediate body. This decentralized blockchain has its own cryptocurrency called Ether (ETH), which is tradable in most of the crypto exchanges. 

What is EOS?

EOS is a new blockchain platform that can also manage smart contracts. The Block.one company launched this project in 2017. It has created history by raising the highest Initial Coin Offering(ICO), worth more than $2.5 billion. It has its own EOS coin, which can be transferred from wallet to wallet. EOS aims to become the most scalable, cheapest, and fastest blockchain platform. 

Scalability

Presently Ethereum can support 15 transactions per second, whereas EOS can serve up to at least 10,000 transactions/second. EOS using IoT provides for inter-blockchain communication, which creates blockchains to allow more transactions. Ethereum is working on two protocols called “Plasma” and “Sharding” to increase transaction numbers per second. 

Transaction Cost

On Ethereum, users need to pay gas for each transaction, but EOS works completely in a different way. EOS blockchain users deposit their token to cover the bandwidth required for the transaction. 

Consensus Mechanism

Ethereum is based upon the proof-of-work model, and EOS follows the proof-of-stake model. The transactions are verified without the support of any intermediate system. Ethereum generates random puzzles at every node before confirming the transactions. These puzzles are so difficult to solve that you need to take the help of experts called “Miners.” While EOS offers to stake your coins to verify transactions, the stakers have a chance to earn the rewards. 

EOS Vs. Ethereum: Who holds the future?

Ethereum, just after Bitcoin, is the most popular cryptocurrency across the world. EOS, right from its initial days, is performing exceptionally well. EOS is yet to achieve growth that Ethereum has already achieved, but EOS is significantly better than Ethereum. EOS is a more user-friendly cryptocurrency than ETH. It’s still too early to think about how far EOS will go because the blockchain ecosystem is highly unpredictable. 

Conclusion 

EOS is younger than Ethereum and has improved scalability and transaction fees as compared to Ethereum, but still, it’s under so much controversy because of its more centralized layout. If Ethereum successfully implements the proof-of-stake mechanism, then EOS might not be able to outperform it. On the other hand, if Ethereum doesn’t reduce it’s transaction costs, then EOS will easily overtake Ethereum soon is what crypto experts believe. Cheers! 

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Cryptocurrencies

What’s IOST Token? How Does It Work and Where To Buy

Current online services are centralized. And this has exposed them to serious privacy violations, fraud, high fees, and regulatory interference. In an era when personal autonomy and privacy are more valued than ever, centralized service provider systems are considered obsolete.

What is IOST | Forex Academy

Current online services are centralized. And this has exposed them to serious privacy violations, fraud, high fees, and regulatory interference. In an era when personal autonomy and privacy are more valued than ever, centralized service provider systems are considered obsolete.

Current online services are centralized. And this has exposed them to serious privacy violations, fraud, high fees, and regulatory interference. In an era when personal autonomy and privacy are more valued than ever, centralized service provider systems are considered obsolete.

Blockchain tech proponents consider it the ultimate solution for all modern problems, and are actively exploring in finding solutions to these issues. Ethereum, Steemit, and EOS are some of the blockchain-based projects that have taken the lead in this regard. However, the majority of them are too specialized. Steemit, for instance, aims to decentralize the ability for content creators to earn from crypto, while Ethereum wants to enable the creation of decentralized applications. 

What’s more, these blockchains are burdened by low transaction throughputs that can sometimes overwhelm the network. Ethereum’s CryptoKitties saga is a glaring example of how much the blockchain is incapable of supporting a massive volume of transactions. These two limitations – inflexibility and lack of scalability – make it impossible for the blockchain to be used for enterprise purposes. 

Internet of Services (IOS) is a blockchain project that wants to power enterprises by providing a Blockchain as a Service platform. This way, online businesses can take advantage of the properties of blockchain technology to improve service delivery for the benefit of all stakeholders. The network has two tokens: IOST and Servi, which play different but complementary roles in the platform. 

What is the Internet of Services (IOS)? 

IOS is a blockchain infrastructure designed to achieve high levels of security and scalability for online businesses. It aims to solve the problem of high fees, slow transactions, and slow throughput associated with the traditional blockchain.

The team believes that these problems are caused by the present limiting nature of the current blockchain infrastructure and its slow transaction verification protocols. The end game is to eliminate these problems so that online service providers can take advantage of blockchain in ways not possible before. 

How Does IOS Work? 

The IOS platform is powered by five pieces of technology, which we’ll take a look at below.

#1. Efficient Distributed Sharding (EDS)

Before we get into EDS, we first need to understand the concept of sharding. Sharding is a data partitioning technique in databases that breaks data chunks into smaller and more manageable pieces. Sharding is by no means a novel concept – but one that’s been used in the computing space for years. 

In a blockchain environment, sharding divides the computational workload of network nodes in a way that every individual node is not responsible for maintaining the entire blockchain, or for participating in the verification of every single transaction. Instead, nodes only maintain information and process the transactional load in their partition/shard. 

But this raises some questions. How do you assign nodes for the shards? How can the network cushion itself against potential malicious node activity? How do you choose leader nodes?

IOS utilizes a Distributed Random Protocol (DRP) to take care of these issues. In a nutshell, DRP utilizes ‘non-interactive zero-knowledge proofs (NIZKs)’ and ‘publicly verifiable secret sharing (PVSS) to create tamper-proof and truly randomized shard nodes. It also uses Algorand and Omniledger protocols to prevent the malicious activity of nodes. With these mechanisms, the network ensures that leader nodes operate the DRP protocol, and are ejected from the network if they don’t.

#2. TransEpoch

TransEpoch is a protocol that enables remaining nodes to continue working when other nodes are downloading transactions’ history data – a process known as ‘epoch.’ TransEpoch uses the Byzantine Fault Tolerance consensus mechanism to prevent malicious nodes from taking over the petition during the epoch. 

#3. Atomix

In any sharding system, the network will always need to conduct cross-shard transactions from time to time. This adds a layer of complexity on the network that renders it vulnerable to double-spend attacks. The IOS network implements the ‘Byzantine Shard Atomic Commit (Atomix)’ protocol to reduce the likelihood of this happening. 

#4. Proof of Believability (PoB)

IOS implements a new consensus mechanism known as Proof of Believability that segregates all the nodes in the network into two categories: believable and normal. This is how it works: believable nodes are in charge of processing transactions, after which normal nodes validate and verify these transactions.

For a node to be assigned into the believable category, it first has to have a satisfactory believability score. This score is calculated based on token balance, reviews by the community, and community participation.

For their part, normal nodes are tasked with ensuring that believable nodes are acting transparently. If a believable node is caught acting maliciously, the believability status is revoked, and they will lose their tokens. This is meant to incentivize good behavior among nodes. 

#5. Micro State Block (MSB)

MSBs are IOS’s way of preventing the blockchain from becoming too bulky. In the traditional blockchain, each node maintains the entire network. While this enhances its security, it also means the whole process is bound to become resource-intensive as more transactions are conducted on the network. 

IOS eliminates this problem through the use of MSBs, which is a protocol that facilitates nodes to validate just the headers of previous transaction blocks (as opposed to entire blocks) and that the entire network is proportionately distributed across shards.

Tokens of the IOS Network

IOS has two tokens: the IOS token (IOST) and the Servi token. The IOS token facilitates transactions and the payment of commission fees on the network. They are also a factor in the calculation of believability scores. Users can earn IOST by validating transactions and renting processing power and storage that will be used in smart contracts execution.  The IOS team distributed all the tokens (a total of 21 million) during the ICO. 

Here are the other uses cases of IOST:

  • Payment for products provided by merchants on the IOS platform
  • Processing transactions and running smart contracts
  • Exchanging for third-party tokens

The token’s distribution was as follows: 

  • 40% for the token sale
  • 35% for the IOS Foundation
  • 12.5% for community building
  • 10% for the IOS team
  • 2.5% for equity investors and advisors

The Servi token measures the contribution of validator nodes. Unlike IOST, the token is not tradable, and it’s automatically destroyed after the verification of a block. This allows the nodes with a high believability score to take turns with the validation process, ensuring a fair process for everyone. The Servi token is self-issuing. 

Who’s on the IOS Team? 

The IOS team comprises members with nothing but stellar credentials. The members are spread across Asia and North America, and include the following: 

  • Kevin Tan, founder of CoinLang (link), CTO of EtherCap, Forbes 30 under-30 awardee, and National Olympiad in Informatics Gold Medalist. 
  • Jimmy Zhong, founder of several startups and an early adopter of Bitcoin and Ethereum
  • Terrence Wang, who has a ton of software engineering experience having worked at Uber and Microsoft. He also develops CoinLang, a higher-level language for Bitcoin.
  • Ray Xiao, founder of several startups and  investor and advisor of several others

Other team members include Samantha Wang, Lei Li, Hao Xu,  Bosch Lee, Chung Teng, Justin Li, Ben Waters, Haifeng Li, Will Zhao, and Kaijian Gao. All these have a wealth of experience cutting across marketing, software, programming. IOS also has an advisory board consisting of names like Jumei co-founder Yusen Dai, Codecademy co-founder Ryan Bubinski, and venture capitalist Robert Neivert. Several high-profile companies have also invested in IOS, including Huobi, FBG Capital, and Sequoia Capital. 

Tokenomics of IOST

As of June 24, 2020, IOST is trading at  $0. 006719, while ranking at #70 in the crypto market. It has a market cap of $100, 849, 968, a 24-hour volume of $85, 871, 372, a circulating supply of 15, 009, 546, 992, and a total supply of 21, 938, 087, 338. IOST’s all-time high was $0.136496 (Jan 24, 2018), while it has an all-time low of $0.001562 (March 13, 2020). 

Where to Buy and Store IOST 

You can grab yourself some IOST tokens from any of several exchanges such as Binance, Huobi, BitHumb, HitBTC, Bitrue, BKEX, BitMax, Upbit, and Bitvavo. It’s available as a market pair with cryptos such as BTC, ETH, BNB, USDT, as well as with Fiat currencies such as the US Dollar and the Euro. 

IOS recommends these wallets for storing IOST: JetStream and IWallet Chrome for desktop, and TokenPocket, Cobo, Starteos, and Huobi wallet apps. 

Final Words

While IOST’s proposition is not exactly new in the blockchain space, it manages to inject something fresh with its novel technologies that guarantee top-notch scalability and security for applications. And the platform is not limited to any specific kind of application, making it flexible for all sorts of businesses. It will be interesting to see how the project evolves over time. 

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Crypto Daily Topic

Is Sharding the Future of Blockchain Systems?

For the past few years, there has been a lot of hype surrounding blockchain – a technology believed to be one of the pillars that will support the 4th industrial revolution. Well, the craze around this revolutionary technology is justified, given the immense benefits it offers to every major industry. To be more specific, data immutability, decentralization, and security; are just some of blockchain’s fundamental properties fuelling the interest in this new technology. 

For the past few years, there has been a lot of hype surrounding blockchain – a technology believed to be one of the pillars that will support the 4th industrial revolution. Well, the craze around this revolutionary technology is justified, given the immense benefits it offers to every major industry. To be more specific, data immutability, decentralization, and security; are just some of blockchain’s fundamental properties fuelling the interest in this new technology. 

For the past few years, there has been a lot of hype surrounding blockchain – a technology believed to be one of the pillars that will support the 4th industrial revolution. Well, the craze around this revolutionary technology is justified, given the immense benefits it offers to every major industry. To be more specific, data immutability, decentralization, and security; are just some of blockchain’s fundamental properties fuelling the interest in this new technology. 

However, there is a general sentiment that blockchain has failed to live up to its hype due to the scalability problem. This explains the slow adoption of blockchain technology, even in industries such as the financial sector, where it’s well suited for use. 

The scalability problem is evident in Ethereum blockchain, which currently only processes less than 20 transactions per second. This leads to high gas prices and hence the cost of executing a transaction, as well as latency problems. Fortunately, sharding and its various iterations have proven to be a viable solution to the persistent scalability problem inhibiting blockchain adoption. 

What is Sharding? 

Sharding can simply be described as database partitioning. The concept isn’t unique to blockchain. In fact, It has been in use since the late 90s as a way of splitting large databases into smaller and manageable datasets. A good example of sharding is in a business where customers’ databases are grouped into geographical locations or age groups for efficient data management. 

Similarly, this concept is extended in blockchain. Essentially, the blockchain network is a large database with numerous nodes/validators that verify data stored in the network. Through sharding, the blockchain network is broken into smaller chunks, commonly known as shards. A set of nodes is then tasked with verifying data on an individual shard instead of verifying every data on the entire network. This way, the computational and storage workload is spread out across nodes, leading to increased throughput of transactions and lower latency. This helps to overcome the scalability problem. As such, the ledger entries are public, only that they are not processed and stored by every node. 

Types of Sharding 

There are several iterations of blockchain sharding, which are often classified in terms of the level of functionality. Below is a review of each type of sharding:

I) Network Sharding 

Network sharding is the most common type of sharding. It involves dividing the entire blockchain network into several subnetworks, with each consisting of one shard. All shards within the network process transactions in parallel, consequently increasing the performance of the entire network. 

However, this type of sharding poses a risk of one node gaining control over a majority of shards, which can lead to attacks or manipulation of the network. A possible solution for this problem would be to use a randomness mechanism to help assign nodes to a particular shard. Merkle tree root of transactions, in this case, can be used to facilitate public randomness to keep a node securely on one shard.  

II) Transaction Sharding 

Transaction sharding is an improvement of network sharding, whereby besides splitting the network into subnetworks, it goes further to divide transactions into groups which are later routed to different shards for authentication. 

III) State Sharding 

On state sharding, the entire ledger information is divided and stored in different shards. This is similar to dividing the state of blockchain into multiple states where each can process transactions independently and interact with others. 

Risks of Blockchain Sharding 

Sharding sounds great in theory, but its implementation is not as straightforward. There are several concerns that arise.

First, sharding can only be implemented on the Proof of Stake algorithm since it has active validators which can be randomly assigned to different shards. Proof of Work (PoW), on the other hand, relies on hash power to validate a block. Therefore, it’d be expensive in terms of hardware and electric power to alter any block.  

If sharding was to be done on the PoW algorithm, it would be feasible for a bad actor to accumulate enough hash power in a particular shard to manipulate the network. This is because by splitting the network – sharding – the hash power is also divided in the process. Therefore, it’ll be easier for bad actors to collude their hash power on a single shard and take control of that particular shard. 

Even when using sharding on Proof-of-Stake algorithms, there still exist challenges. One of these is maintaining inter-shard communication. Often, when nodes are assigned to a specific shard, all the associates of that particular node view the shard as an independent blockchain system, yet it’s just a segment of the larger network. In such a case, establishing inter-shard communication has proven to be difficult, requiring special efforts to develop communication systems. Even with the few inter-shard communication systems, most of which are yet to be rolled out into the market, they all have to sacrifice one of the key properties of blockchain – decentralization, and security – to achieve efficient communication. 

Also, as stated earlier, there are different forms of sharding, with each approach featuring its own pros and cons. This has led to a conundrum among industry players in terms of deciding which approach to take. 

The Future of Sharding 

Sharding has its own share of challenges slowing down its effective implementation, but it still presents an opportunity for solving the wider scalability problem facing blockchain technology. As Ethereum co-founder Vitalik Buterin once said, it’s impossible to maintain the two fundamental properties of blockchain – security and decentralization – when trying to solve scalability using sharding. His sentiments can be extrapolated to mean that, for now, the blockchain space has to rely on sharding for the maturation of the technology, and maybe with time, new approaches will be designed such that they don’t compromise on blockchain’s fundamental properties. 

In fact, social media giant Facebook under its Libra coin project recently acquired Chainspace – a blockchain start-up focused on sharding. Probably this suggests that Facebook’s Libra coin project may be considering using blockchain sharding to increase the coin’s throughput. It’s further predicted that with Facebook’s interest in blockchain sharding, new complementary technologies will be designed to solve some problems such as cross-sharding communication, to deliver the necessary scalability. 

Conclusion 

Scalability is one of the roadblocks hindering blockchain’s mainstream adoption. With the borrowed concept of sharding, technology has a better chance of finally replacing the traditional data infrastructures. However, the blockchain sharding still struggles with a few bottlenecks that need to be ironed before this happens. With big data companies such as Facebook showing interest in the technology, we can anticipate that the solutions to challenges facing it will materialize soon. 

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Crypto Daily Topic

Altcoins with Lightning Network Support

Satoshi Nakamoto’s vision was for Bitcoin to be a digital currency that could be transferred between users in a fast and secure manner. However, if he intended for the network to one day compete with established payment systems, then he probably did not take into account the scalability level that Bitcoin would need for that to be possible.

Lightning Crypto_Forex Academy

Satoshi Nakamoto’s vision was for Bitcoin to be a digital currency that could be transferred between users in a fast and secure manner. However, if he intended for the network to one day compete with established payment systems, then he probably did not take into account the scalability level that Bitcoin would need for that to be possible.

Satoshi Nakamoto’s vision was for Bitcoin to be a digital currency that could be transferred between users in a fast and secure manner. However, if he intended for the network to one day compete with established payment systems, then he probably did not take into account the scalability level that Bitcoin would need for that to be possible.

As it is now, Bitcoin can muster only seven transactions per second, which pales in comparison to, let’s say, Visa’s 1700. And as more users troop to the network, waiting times and transaction fees continue to increase.

If Bitcoin hopes to ever compete with existing payment models, some adjustments may need to be made to its fabric.

The Lightning Network

Lightning network_Forex Academy

Over the years, Bitcoin developers have come up with several solutions to this problem, from Plasma to Segregated Witness, to sharding, to the Lightning Network (LN).

Proposed by Thaddeus Dryja and Joseph Poon in 2015, LN is an extra layer for the Bitcoin blockchain that uses two-way payment channels to allow users to transact with each other with very nominal fees. Once the parties close the channel, only the initial and final transactions are recorded on the Bitcoin blockchain. Users in a payment channel conduct as many transactions as they want – which happens within seconds and with minuscule fees.

The idea is to reduce congestion in the Bitcoin blockchain and to achieve fast transactions since users do not have to wait for transactions to be processed. On LN, participants can engage in transactions without the need to know or trust each other.

LN is designed for Bitcoin’s scalability problem, but several other cryptocurrencies are looking to adopt the technology to enhance their scalability. Cryptocurrencies that use a different model from Bitcoin, and are hence incompatible with the technology, are working on a similar solution. This article is a look at various cryptocurrencies’ take on the Lightning Network.

Bitcoin and Lightning Network

Bitcoin Lightning_Forex Academy

Lightning Labs, a company dedicated to developing scalability solutions for Bitcoin, released a beta version of the technology for the blockchain in December of 2017. This year, the team announced that they had developed a v0.10 beta version, which is an upgraded version of the first release. This version comes with improvements such as bug fixes, architectural improvements, better security and privacy, and more.

Lightning Labs is not the only startup that’s working on an implementation of the Lightning Network. Other companies such as C-Lightning, Blockstream, and ACINQ are also working on their version of the tech.

Also, several developers have already worked on Lightning Network wallets. Some available options include:

  • Eclair – a mobile wallet for Android designed by ACINQ
  • Munn Wallet – A non-custodial wallet that enables you to make instant payments without configuration procedures
  • Zap – A free Lightning Network wallet that’s simple to use and user-experience-focused.
  • Nayuta Wallet – This a non-custodial wallet for Bitcoin and the Lightning Network
  • Phoenix – This is a non-custodial wallet Lightning Network wallet with a user-friendly and intuitive interface
  • SATs App – SATS App allows you to send Bitcoin like you would a text message, via the Lightning Network

Litecoin and Lightning Network 

Litecoin is modeled after Bitcoin, and is often referred to as ‘the silver to Bitcoin’s gold’. As such, you would expect that the two cryptocurrencies are in direct competition.

Indeed, Lightning Labs’ initial debut implementation of the technology went live on both Litecoin and Bitcoin’s blockchains. Also, the company’s cross-atomic swaps function (the direct swapping of tokens between respective blockchains- bypassing crypto exchanges) was first tested on both Bitcoin and Litecoin.

Though the technology is yet to be implemented on Litecoin, when it does, it will give the network a much-needed push towards wide adoption.

Ethereum and Raiden

The Ethereum network can process transactions two times faster than Bitcoin. Ethereum can currently process 15 transactions per second, while Bitcoin can process 7.

However, Ethereum’s blockchain has more users and is busier than Bitcoin’s since it also runs decentralized applications (DApps) and facilitates initial coin offerings (ICOs). This means the network handles a lot of traffic as it processes token sales and smart contracts. As such, Ethereum needs a different scaling solution, but one uniquely suited to its needs. Several proposals are in the works, but a notable one is Raiden.

Raiden’s concept is much like that of the Lightning Network: providing an extra layer aside from the main blockchain through which individuals can use two-way payment channels to conduct instant and secure transactions with very nominal fees. The difference lies in that Raiden is ERC20 compatible, meaning all tokens issued on Ethereum can use Raiden.

ZCash and BOLT 

The Lightning Network will make transactions on transparent blockchains like Bitcoin a bit more private since payments on the two-way channel will not be broadcasted on the main blockchain. However, the initial and final transactions will be added to the main chain.

ZCash is a privacy crypto network that seeks to provide users with enhanced privacy and anonymity. The Lightning Network’s incomplete privacy state will obviously not mesh well with ZCash – necessitating the need for its own scaling solution.

The network’s proposed solution for this end is called ‘BOLT’ (Blind Off-chain Lightweight Transactions). Created by Ian Miers and Matthew Green, BOLT is inspired by the Lightning Network, only that its approach involves ensuring payments on the same channel cannot be linked to each other, even by transacting parties. Also, transactions occur in milliseconds – without requiring block confirmation.

It will achieve this by utilizing two pieces of technology: blind signatures and commitments. Commitments allow users to hide the value of transactions. Signatures convince users to sign for transactions without recognizing which one they are signing for exactly.

Ripple and Lightning Network

Ripple_ Forex Academy

In August of 2017, Ripple, together with blockchain company BitFury, released a code that integrated the Lightning Network with Interledger. Interledger is a protocol by Ripple that enables transactions between different blockchains. This means not just blockchains like Bitcoin and Ethereum, but also private blockchains and traditional payment models like PayPal.

Ripple doesn’t really need a scalability solution – it can already process an impressive 1500 transactions per second. The network hopes to integrate LN technology for its atomic swaps function and to achieve compatibility between cryptocurrencies.

Ripple’s CTO Stefan Thomas illuminated on this while speaking to Coindesk, saying: “I shouldn’t have to care which particular coin you use or like. If you’re on PayPal and I’m on Alipay or if I’m on Bitcoin and you’re using a bank account, I’ll still be able to send you money and not worry about it. That’s the long term goal.”

Monero and Lightning Network

Just like ZCash, Monero is a privacy-oriented coin, meaning if it needs to use LN for scaling purposes, it will need to put in place some privacy features.

Still, it looks like Monero intends to utilize the Lightning Network for its atomic swaps technology and not so much for its scaling solution. There are also plans to work with Litecoin in a bid to use the Lightning Network into Monero and enable atomic swaps between the two blockchains.

The idea is to ultimately enable Monero users to swap their coins for any other cryptocurrency via LN in the future.

Neo and Trinity

The NEO platform is much like Ethereum in the sense that it provides a platform for developers to create DApps and for users to create smart contracts. As such, it needs a scaling solution to handle the massive traffic and take the strain off the main chain. This solution is called ‘Trinity’ and is still in the works. The solution will see the NEO network scale to new heights of scalability, seeing as it can already handle 1,000 transactions per second.

Stellar and Lightning Network

Stellar is a payment protocol for making fast, secure, and cheap transactions. As it is, the Stellar network can process up to 1,000 transactions per second.

Still, Stellar has announced plans to integrate the Lightning Network. Co-founder and CTO Jed McCaleb stated that this technology has the potential to improve scalability, privacy, and interoperability for the network.

Speaking to Bitcoin Magazine, McCaleb said: “We’re super excited about Lightning,” adding, “In order to keep the network efficient and stable, we need something like Lightning.”

Final Thoughts

The Lightning Network is a great solution for cryptocurrency networks to achieve scalability, more privacy, and cheaper transactions. When these blockchain networks finally roll out their LN solutions, they can go toe to toe with traditional payment systems, and users can expect a better experience.

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Cryptocurrencies

Zilliqa Blockchain: What Is Ziliqa And How Is It Turning Blockchain Upside Down

Anyone that’s transacted on the Bitcoin blockchain is aware of how long transactions take to be confirmed. In fact, Bitcoin transactions can take anything from 10 minutes to one day, depending on traffic. One of the things a digital currency is supposed to accomplish is speed. This is one goal that’s yet to manifest for Bitcoin and, indeed, the majority of blockchains.

Anyone that’s transacted on the Bitcoin blockchain is aware of how long transactions take to be confirmed. In fact, Bitcoin transactions can take anything from 10 minutes to one day, depending on traffic. One of the things a digital currency is supposed to accomplish is speed. This is one goal that’s yet to manifest for Bitcoin and, indeed, the majority of blockchains.

Anyone that’s transacted on the Bitcoin blockchain is aware of how long transactions take to be confirmed. In fact, Bitcoin transactions can take anything from 10 minutes to one day, depending on traffic. One of the things a digital currency is supposed to accomplish is speed. This is one goal that’s yet to manifest for Bitcoin and, indeed, the majority of blockchains.

Many blockchains are remodeled after Bitcoin’s blockchain, one way or another. The result is the same, slow transactions and waiting times. Zilliqa changes this by deconstructing the current blockchain concept.

Let’s delve into the interesting way that it does this.

What’s Zilliqa?

Zilliqa is a scalable blockchain with the ability to process thousands of crypto transactions every second. This is made possible by its adoption of the sharding technique. Sharding is by no means a new concept, nor was it invented for blockchain. The technique has been around for a while and is majorly used to partition databases to make workloads more manageable.

Blockchain’s Scalability Problem

The current blockchain, as we know it, uses the consensus mode of transaction confirmation that has faced scalability issues since its inception. This is due to thousands of nodes in any blockchain network that makes it harder to reach consensus. The speed of a network is inversely related to how large it is. The bigger the network, the more nodes that have to reach a consensus on transactions, slowing their confirmation.

Consider Bitcoin’s blockchain. As more users use the network, confirmation time is slower, and the transaction fee increases. Moreover, those who want faster confirmation are forced to pay more in order to get first priority. This is not only expensive, but it also goes against the democratic nature and accessibility-for-all of cryptocurrency.

The Ethereum blockchain, the second most popular, also has an inherent scalability problem. This is best illustrated by the Cryptokitties fiasco, whereby the game’s developers had to increase the transaction fees in order to at least reduce network congestion. This demonstrated how the network couldn’t handle massive amounts of traffic.

Right now, both Bitcoin and Ethereum, with their transaction throughput of 7 and 15 transactions per second respectively, are unable to compete with traditional payment systems such as Visa, which handles as much as 1,700 transactions per second.

The problem with proposed scalability solutions

Now, solutions that have been proposed for the blockchain scalability issue are not sustainable for the long haul. One of these is moving part of the transaction data off the chain. Others are increasing the block size so that consensus can be established for each round of transactions.

These are band-aid solutions that don’t fix the fundamental problem. The ideal solution would be overhauling the entire architecture so that the rate of nodes giving consensus is positively correlated with the network size.

Zilliqa’s Scalability Answer

Zilliqa proposes to solve this problem by re-imagining the entire blockchain from the ground up. This new model involves implementing a hybrid consensus that will grow the network’s throughput with every 600 new nodes that join.

Theoretically, for every 600 new nodes, Zilliqa’s throughput increases by dividing the work. In practice, an ever-increasing network (let’s say 1 million nodes) can present broadcast issues.

However, no network as yet has reached 1 million nodes. Both Bitcoin and Ethereum currently have tens of thousands of nodes. Even with that number, they’re still only able to process an average of 3-15 transactions per second (TPS). By contrast, with only 1800 nodes, Zilliqa has a throughput of 1218 TPS. When this number is doubled to 3,600 nodes, Zilliqa can handle up to 2, 488 TPS.

Zilliqa’s Sharding Protocol

So, what’s Zilliqa’s plan to achieve this scalability? It does this by utilizing a process known as sharding. The Zilliqa protocol divides the nodes on the network into groups of 600 each. Each group is called a shard. For instance, if a network has 2400 nodes, the nodes will be divided four times, with each group getting 600 shards.

Zilliqa Sharding_Forex Academy

So, as more nodes join the network, they are automatically distributed to create shards. Each shard will process a small part of each transaction. For instance, if there are ten shards on the network, each processes a tenth of the total transaction. Thus, the more shards you get, the more work you have, the faster the workload, and the faster the transaction throughput.

Every shard processes the transaction the parallel shard is working on. A parallel process is known as a ‘DS epoch.’ After every epoch, the blocks will come together and form a full block.

The DS Committee

Zilliqa has a “DS committee” that manages shard allocation. For each DS epoch, nodes are randomly selected to manage the shards. These nodes are the ones known as the DS committee, and they decide which shards the nodes are allocated to.

Finding Consensus: Proof-of-work and Byzantine Fault Tolerant Mechanism

Zilliqa utilizes a hybrid consensus mechanism that works as follows:

The first stage of the mining process involves proof-of-work (PoW). The PoW involves completing a hash to prove and establish identity, making it impossible for a bad actor to create multiple identities and overwhelm the network. After a node’s identity is proven, it’s assigned to a shard.

In the shards, Zilliqa applies a Practical Byzantine Fault Tolerance consensus (PBFT). Now, this mechanism has a finality, meaning the majority of the nodes in a shard must reach consensus on a mini-block. Once a block is verified by the shards and the DS committee, it becomes the only block that can be linked to the one before it.

Zilliqa’s Scilla

The Zilliqa team has developed a new programming language known as Scilla. Scilla is an intermediate-level language that separates the programming and communication aspects of smart contracts. It helps to differentiate between functional contracts compatible with Zilliqa’s blockchain, and state-dependent contracts that are not yet supported by Zilliqa.

Zilliqa Token

Zilliqa has a native token known as ZIL. ZIL token acts as an incentive for miners, gas for fueling smart contracts, and for covering transaction fees.

As of May 8, 2020, Zilliqa is trading at $0.006985 and ranks at #75. It has a market cap of $101,107,215, and a 24-hour trade volume of $23, 583, 984. A total of 10 billion ZIL tokens are in circulation. The coin has a total supply of 13 billion and a maximum supply of 21 billion. ZIL’s all-time high was 0.231489 on May 19, 2018, and its all-time low was $0. 002477 on March 13, 2020.

Who’s the Team Behind Zilliqa?

The Zilliqa team mainly comprises of people with a computer science background. CEO Xinshu holds a Ph.D. in Computer Science from the National University of Singapore. Chief Scientific Advisor Prateek Saxena holds a Ph.D. in the same field form the University of California, Berkeley. Head of Research Amrit Kumar has a Ph.D. from Université Grenoble-Alpes, France, as well as an Engineer’s diploma from Ecole Polytechnique, France.

The project’s advisory board comprises of notable figures in the blockchain sphere. These are Loi Luu, co-founder of Kyber Network; Vincent Zhou, founding partner of digital asset management firm FBG Capital; Nicolai Oster of Bitcoin Suisse AG, and Strong Hold Labs CEO – Alexander Lipton.

Where to Buy and Store Zilliqa

You can find Zilliqa at any popular exchanges, including Binance, Huobi, Coinbase Pro, Gate.io, Kucoin, BitFinex, Coinswitch, OKEx, and YoBitNet.

Zilliqa recommends the following trusted wallets for storing your ZIL: Ledger, Trust Wallet, Zillet, ZilPay Wallet, Infinito Wallet, Math Wallet, Atomic Wallet, Zil Cli, and the Zil Wallet. Different wallets exist in different forms, such as iOs, Android, web browsers, and hardware.

Final Thoughts

Despite the current proliferation of blockchains, Zilliqa managed to come up with a unique solution for a persistent problem in the blockchain. While many existing blockchains scramble to integrate sharding, Zilliqa has the headstart of implementing it from scratch. We can expect to see many more blockchains being launched with this technology in the future.