Blockchains will sputter without a scalable solution
As the very first blockchain to come into existence, bitcoin represented the birth of the blockchain revolution.
Its Proof-of-Work consensus algorithm has become the backbone on which all other blockchains have been built.
Furthermore, as a payment protocol that has been adopted by nearly everyone in the industry, it has served as inspiration for all other creative blockchains. Staying true to the original intent of blockchains, the bitcoin protocol is fully decentralized and anonymized, as the project is not owned by any one entity.
As a result, however, it is very difficult to reach consensus to make critical changes and improvements to the protocol. For example, the debate over block size and scalability has lasted for more than three years and has not resulted in any significant change.
Ethereum emerged after bitcoin as the “blockchain 2.0,” with additional features that enabled a programmable platform for source code to be deployed and executed on a blockchain. Thousands of projects are currently built on top of the Ethereum blockchain, which helps drive the hype of the industry and public popularity due to the network effect. However, most of these projects use Ethereum as a fundraising platform, rather than as a platform for products with real-world applications.
Another solution comes in the form of the Qtum blockchain. Qtum adopts many of the mature technologies that are maintained by the bitcoin community, while simultaneously embracing the flexibility and scalability that Ethereum provides.
It has combined bitcoin’s Unspent Transaction Output model, a global data set that reveals to users the balance of every address in the network and is updated whenever a transaction is processed, with the Ethereum Virtual Machine’s smart contract platform, a trustless way to execute an agreement involving cryptocurrency between two or more parties.
Qtum also has built a Proof-of-Stake consensus algorithm into its blockchain, a feature that has been in the Ethereum road map for more than four years and is still undergoing research. Proof-of-Stake protocols enable a fully decentralized network by eliminating mining power centralization, which is more practical for business adoption. However, this consensus algorithm remains somewhat controversial as to whether it is truly secure and resilient to attacks.
Determining which blockchain to use is dependent on a number of factors, including the goals and scope of a particular project. The blockchains that likely prove the most durable and widely used will likely be those that have most effectively developed scalable protocols. We look forward to seeing more adaptable and stable solutions in the blockchain space.