Cryptocurrencies are expanding to become mainstream. Day by Day, there is a significant increase in the Bitcoin Transactions. The main issue is, we haven't found a way to solve the scalability problem.
Is Blockchain Scalability a big issue?
Cryptocurrencies are not built with the main purpose of widespread use and adaption in mind. With the increase in the number of transactions, there is an increase in the number of other issues.
Various crypto enthusiasts believe that Cryptocurrencies will soon be able to compete with PayPal and Visa. When we compare, we are too far from it.
Presently, Visa is the fastest payment network, it is able to process around 24,000 transactions per second. While PayPal is able to process 193 Transactions per second.
Most of the Cryptocurrencies doesn't provide fast transactions. Ripple is a unique crypto and it can process about 15,000 transactions per second, hence it has the high potential to become an assured payment method in the near future.
While Bitcoin and Ethereum have can perform very low transactions of 7 and 20 respectively. This problem highly restrains the possibility of whether becoming the mainstream payment methods in the near future.
Proof-of-Work (PoW) Vs. Proof-of-Stake (PoS)?
The two most well-known mining protocols are Proof-of-Work (PoW) Vs. Proof-of-Stake (PoS).
But, there are major issues faced by both the protocols. For beginners, the Bitcoin PoW protocol has encouraged a huge number of individuals and organizations to buy more hardware equipment and construct big mining farms, instead of the reason that Bitcoin is considered to be the most decentralized blockchain. Due to this, a high amount of hashpower is managed by a small number of organizations.
The PoS protocol provides only a few benefits when compared with PoW protocol. For example, moderately lower computational requirements, slightly lower power consumption, and slightly faster transaction speeds. But, this protocol has its own issues.
In a PoS protocol, the higher the user stakes, the higher the chance to obtain the block reward. This proves that the system only rewards big organizations which have huge money on stake.
IOTW's Proof-of-Assignment (PoA) Protocol
In order to solve the above issues, IOTW has found a new way of mining, called as Proof-of-Assignment (PoA). This protocol will need relatively low computational power when compared with PoW and PoS protocol. Hence, even a basic electronics device possess the ability to mine IOTW coins without even increasing its electricity usage.
Possibly, the most important factor is that PoA protocol considerably faster than both PoW and PoS protocols, making it the main solution for the existing scalability issues faced in the blockchain. PoA has the ability to process thousands of transactions per second, which is far better than Bitcoin, Ethereum, and various other cryptocurrencies.
Their main goal is to process 1M transactions per second, which would allow them to process even more transaction as compared to VISA.
One of another advantage of PoA protocol is that it is entirely compatible with IoT devices, and also there is zero risk of power loss. This will be important in the near future, as IOT industry is growing rapidly.
Ultimately, blockchain will be widely accepted, it is important that it should be simple and suitable to use. All the users who want to mine IOTW coins, they don't require any additional software. To mine IOTW, just download the firmware and start mining instantly.
Moreover, the companies might include IOTW pre-installed in devices to make mining a lot easier.
The Delegated Proof-of-Stake (DPoS) Protocol
In this protocol, token holders don't really vote on the validity of blocks by themselves. Preferably, they choose delegates to do it.
Here, PoW and PoS need miners to compete for the blocks, While DPoS protocols enables the miners to join to create blocks. Hence, DPoS runs possibly faster as compared to other protocols.
Presently, it takes around 10 minutes for a Bitcoin block to be mined. EOS, which is the first coin which has implemented DPoS protocol takes around 1 second to mine one block.
Thus, the protocol enables cheap transactions, increases scalability and makes the process more efficient. The main drawback of the protocol is, it is partially centralized.
What is the Future of Blockchain Scalability?
There has been implemented various different blockchain solutions in the last few years. Each solution has its advantages and disadvantages. There has been a great debate on these sessions.
One of the most crucial factor to consider is, to support the heavy usage of cryptocurrencies, we have to put in great efforts to find a relevant solution.
From the above points, we hope that the Blockchain Scalability issue can be solved in the near future.