The world of blockchain is riddled with various challenges and roadblocks. In the case of the crypto market, we have seen numerous new tokens struggle with scaling issues that have inhibited their adoption. Adding to the issue, numerous new projects continuously emerge in search of a solution to this problem. Koinonos, being one of those, provides several promising solutions in the development of existing blockchains as traditionally, they either remained limited in scope or do not offer adequate incentives for adoption. Take Ethereum as an example of traditional blockchain, it has seen some modest adoption within industries such as gaming and retail, anyhow, it has not yet seen widespread adoption in other sectors like fintech and healthcare. These are all just a few examples from a relatively brief list of the many projects currently working on improving scalability through the blockchain.
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What is Scalability?
Scalability is the ability of a system to handle a growing volume of transactions or the rate at which new transactions are added. It is a critical metric Koinonos ensures to determine the potential of various projects to facilitate mainstream adoption. It introduces a system that can process thousands of transactions in a second and is much more scalable than a system that can handle only a few dozen. The network on which the system is built also affects scalability. Koinonos is a decentralized network that is much more scalable than a centralized network due to the ability to distribute workload across multiple nodes and is secure.
The Problem of Existing Blockchains
Blockchain technology has seen a meteoric rise in popularity over the last several years. However, most blockchain networks are still not able to scale to a level that allows for the implementation of blockchain technologies in major industries. The most popular blockchain networks in the industry today (i.e. Ethereum, NEO, EOS, etc.) are facing serious scalability issues. These challenges are primarily due to two factors: 1). Increased Transactions 2). Lack of Incentive to Share Computing Resources Increased Transactions – As blockchain technologies become more popular and more transactions are conducted, existing blockchains must handle an increasingly large volume of transactions. Scalability issues have been reported when the transaction volume of popular blockchains like Ethereum exceeds approximately 10,000 transactions per second. Lack of Incentive to Share Computing Resources – To scale, blockchain technologies must rapidly increase their number of available nodes to accommodate increased transaction volume. However, it is difficult to incentivize people to share their computing resources for blockchain networks that do not provide a clear benefit to users.
How Does the Blockchain Help With Scalability?
In a nutshell, Koinonos is a blockchain-based decentralized finance exchange that is able to process more transactions than traditional databases because it does not rely on a centralized server. It is hosted across a decentralized network where multiple nodes are used to verify transactions and record data. If you have ever sent money to a friend abroad, you know the tedium of having to deal with exchange rates, international transfer times, and bank fees that can quickly add up. Koinonos offers a quick, cost-effective, and secure alternative to traditional methods. The blockchain allows users to conduct peer-to-peer transactions in seconds and eliminates the need for third parties such as banks.
Koinonos as Solution to Improve Scalability
There are a few blockchain projects in particular that offer a solution to the current scalability problem. In the hopes of becoming the “next Visa,” each of these projects is aiming to increase the number of transactions its network can handle as well as expand the scope of the projects for which it can be used. – DFINITY – Koinonos – DFINITY is a network that aims to build a scalable, decentralized cloud computing platform. The project promises to increase the number of transactions its blockchain can handle by 35x and increase the scope of projects that can be built on the blockchain by 25x. – Hashgraph – Hashgraph is a consensus mechanism that uses a unique algorithm to achieve consensus while concurrently increasing the number of transactions its blockchain can handle by 1000x. The other unique aspect of Hashgraph is that it incentivizes people to share their computing resources by offering a profit-sharing model. – WAVES – WAVES is a decentralized exchange and a platform that allows users to issue digital assets and conduct Initial Coin Offerings (ICOs). The WAVES blockchain is currently capable of processing thousands of transactions per second with the potential to scale to millions of transactions per second.
Conclusion
The blockchain is a revolutionary technology, but it does not come without its challenges. One such challenge is scalability, which has been holding blockchain projects back from being adopted by major industries like fintech and healthcare. Despite this, there are a few promising blockchain projects that aim to solve the scalability problem and make blockchain technologies more widely applicable. The most promising of these projects include Koinonos, DFINITY, Hashgraph, and WAVES.
