Blockchain Scalability: How Developers can Handle Increased Demand

When the question of blockchain sustainabiity surfaces, it becomes clear that despite the attractive features like minimization of trust and data security, blockchain must eliminate its leading drawback- scalability.

Resolving this has been a focal point of research in the space. Starting from the introduction of the Bitcoin Lightning Network in 2015 by Joseph Poon and Thaddeus Dryja, which remains an ongoing development, to the development of the Segregated Witness protocol for the Bitcoin blockchain introduced by Pieter Wuille and the Ethereum transition to Proof-of-Stake following the launch of the Beacon Chain in 2020,  years of research, launch and invention have been dedicated to creating a handful of tools or protocols that can use leverage by developers to boost system efficiency and handle increase in demand.

        Get Beacon Chain API on Chainnodes

Why is scalability an issue?
Scalability is crucial to blockchain because it determines the speed at which blockchain performs required tasks without compromising system safety. This is to say that the issue of scalability touches both the functionality and security of blockchain.

Areas Where Scalability is Required in Blockchain

• Blockchain Execution: Blockchain usage starts with users’ ability to initiate transactions and continues to the computation power of the blockchain to seamlessly and swiftly execute those transactions. One of the leading promises of blockchain is the ability to perform thousands of transactions within seconds, but executing a transaction goes beyond initiating it. Once a transaction is set in motion, the technical capabilities of the network are required to complete things like checking transaction validity through signature verification, executing on-chain activities to discern state change, communicating with smart contracts for predetermined execution and more. For this purpose, blockchain requires a robust computational power to deliver efficiently irrespective of growth in the number of transactions or users.
• Blockchain Consensus: A critical part of the blockchain technological framework is the consensus mechanism used in verifing and validating transactions. At this point, blockchain employs the service of miners or stakers who are required to gather several unverified transactions on the blockchain, verify the transactions and communicate validity with blockchain. The role of these validators is integral to blockchain security for reasons like detecting fake transactions, preventing double spending and kicking out malicious actors.
• Blockchain Storage: Blockchain data are stored on a decentralized and tamper-proof distributed ledger to ensure genuine data security and accuracy. Also, blockchain, particularly public blockchain, is an open-source infrastructure where data accuracy can be checked and audited by anyone globally. These innovative approach attract many users, leaving blockchain with millions of transactions and data that must be carefully stored and guarded.

4 Ways to Improve Blockchain Scalability

Scaling can be horizontal, when computation power of a single system is enhanced by using adding more nodes or infrastructures to distribute the computational and storage load, or vertical, when the capacity of  blockchain nodes or infrastructure is improved to meet high demand.

1. Scale blockchain through enhanced hardware and Infrastructure: This is a vertical scaling solution that can used to achieve robust scalability at execution, consensus, or storage level. This implies expanding the requirement for hardware used to perform those activities. For instance, let’s examine a data storage and retrieval process using the Chainnodes RPC. Usually, the system implements a block range limit when using the eth_getLogs API call to preserve system efficiency and prevent excessive usage. However, Chainnodes also offers a scalable approach to data storage and retrieval by allowing developers to opt for The Graph dedicated nodes, this is an enhanced data retrieval procotol that can be used extensively by developers .
   Tradeoff: Increasing the requirement for blockchain hardware may increase the cost of hosting validator nodes, which may essentially leave the task in the hands of a few validators and jeopardize blockchain decentralization.
2. Use modular blockchain framework: While there are certain benefits to using a single blockchain, the truth is that developers run the risk of excessive usage and slow time when all activities are performed on a single blockchain. This is where modular framework become a more viable alternative. A dApp using a modular blockchain structure runs blockchain activities using different layers. Different blockchains handle transaction execution, data storage, and consensus to improve efficiency. Here, options like roll-up are used to reduce the number of tasks sent to the main chain and, therefore, increase the speed at which those tasks are performed without compromising blockchain integrity. To seamlessly communicate with different L1, L2, and L3 chains, developers can leverage Chainnodes RPCs, where you can aggregate requests per month across the network under a single plan.
   Tradeoff: Performing transactions on different layers may increase security risk and also lead to a lack of liquidity due to the fragmentation of assets.
3. Reduce networking bandwidth: This is a scalability approach that focuses mainly on improving consensus mechanisms to effectively increase the speed at which transactions are validated and finalized. Scalable consensus can be achieved by reducing the level of communication (network bandwidth) required among nodes before transactions are validated.
   Tradeoff: This may reduce blockchain integrity because nodes are not required to communicate with all the nodes before validating transactions; instead, they are required to communicate with only specified nodes.
4. Multi-chain or Sharding: Sharding or multi-chain is a horizontal scaling approach for blockchain execution or data storage systems. By distributing tasks among several chains or shards, you can reduce activities on the main chain. Each shard or chain is essentially runs its won ledger and can execute transactions or store data distinctively, making the main chain a point of contact where shards are synced together. For example, Polkadot is a multi-chain network that uses multiple parachains to handle distinct transactions, all the parachain chains form a part of the larger network and can communicate with one another to facilitate inter-chain activities.

Tradeoff: One of the significant drawbacks of using multi-chain or sharding as a scalability solution is that they are both complex to manage. For sharding, you must consider the complexity of running distinct consensus mechanism per shard, while multi-chain is generally complex to operate due to the multiplicity of chains.

Like every system, blockchain comes with certain benefits and drawbacks; while challenges are natural, it is essential to ensure that blockchain functionality is maintained at all times. Building scalable protocols requires a careful blockchain selection process and reliable infrastructure. From Layer 1  to Layer 3 blockchains, you can access functional RPCs and APIs on Chainnodes to scale up both the dApp-building process and system efficiency.