Let‘s face it; the biggest challenge with almost all cryptocurrencies is scalability. For starters, scalability is a cryptocurrency’s capability of coping with an influx of enormous transactions at a time. For instance, if there are more than seven transactions per second on the Bitcoin network, will queue on the network for the transaction to be complicated.
The queue can sometimes be quite long, causing transactions to take several hours to be resolved. Despite Bitcoin and Ethereum being the leading cryptocurrencies in terms of market value and popularity, they are quite slow-Bitcoin can only manage 3-7 transactions per second while Ethereum handles 15-20 transactions per second.
This is really slow compared to traditional payment platforms such as PayPal and Visa, which can handle up to 10 000 transactions per second. Nonetheless, not all cryptocurrencies suffer from scalability issues, with some supporting up to 20 000 tps. Here, we look at the top five most scalable cryptocurrencies you can consider if youre seeking fast crypto transactions.
State of Scalability in the Crypto Space- The Blockchain Scalability Trilemma
From the onset, scalability has been a major challenge in the crypto space. Bitcoin openly admitted that it was not scalable through the opening line in its whitepaper, which opened by saying, “We very, very much need such a system, but the way I understand your proposal, it does not seem to scale to the required size.”
The Blockchain scalability trilemma makes it challenging to achieve a truly decentralized, secure, and scalable cryptocurrency. For instance, Bitcoin is secure and decentralized but suffers from enormous scalability challenges. On the other hand, Ripple XRP is highly scalable but has limited decentralization, plus its less secure. Similarly, EOS is highly scalable but less secure and has limited decentralization. To achieve high scalability, most crypto projects have opted to sacrifice security and decentralization.
5 Best Scalable Cryptocurrencies 2020
1、Nano(NANO)
Nano is a feeless distributed cryptocurrency network built on a directed acyclic graph (DAG) architecture and released under the FreeBSD License. The network is peer-to-peer, meaning that it operates without intermediaries by leveraging a distributed ledger, constituting a block-lattice data structure-technically, not a blockchain. The crypto was launched in October 2015 by Colin LeMahieu to address blockchain limitation issues, including high latency, poor scalability, and power inefficiency.
Nano is the most scalable cryptocurrency thanks to the “block-lattice” data structure, making it have near-instant transactions with no fees. The network can confirm transactions in under 1 second, making it the most scalable cryptocurrency. While it offers maximum scalability, the networks decentralization is limited.
2、Ripple(XRP)
Ripples XRP is one of the most decentralized cryptocurrencies designed for cross-border payments and liquidity sourcing. The network is an open-source, permissionless, and decentralized blockchain technology capable of settling transactions in under 5 seconds. The protocol can handle at least 1 500 transactions per second and scale up to 50 000 TPS-Visas. Ripple has been designed with scalability in mind.
However, unlike other cryptocurrencies, Ripple is not built on a blockchain. Instead, the company has developed its network referred to as the Ripple Protocol consensus algorithm. As such, XRP has been disputed as a cryptocurrency in several instances.
3、Qtum( Q TUM)
Qtum is an open-source blockchain application platform that utilizes UTXO security to allow multiple virtual machines, including the innovative x86 virtual machine and EVM. The platform is based on PoS and boasts of a Decentralized Governance (DGP). The currency is the first UTXO-based smart contract system with a proof-of-stake (PoS) consensus model.
Qtum network can handle an incredible 10 000 transactions per second. The network claims that transactions are confirmed as soon as users send them on the network. However, its important to note that Qtum has never been tested by a third-party to ascertain the transaction speeds.
4、QuarkChain (QKC)
QuarkChain is a revolutionary multilayer flexible, scalable, and user-oriented cryptocurrency designed to allow for peer-to-peer transactions. The cryptocurrency is highly scalable thanks to its innovative blockchain sharding technology. In fact, the cryptocurrency is one of the first public chains to leverage state sharding technology successfully. QuarkChain can successfully deliver at least 100 000 on-chain transactions per second as the network continues to grow. At the moment, QuarkChain can handle 55 000 TPS, making it one of the most scalable cryptocurrencies. In addition to being decentralized, QuarkChain is highly decentralized, boasting of a two-layered blockchain structure.
5、IOTA
IOTA is a revolutionary distributed ledger technology that seeks to secure both value and data exchange without any fees. The cryptocurrency has been designed for the Internet of Things and offers endless possibilities. IOTA employs an unusual network design where miners dont take part in validating transactions; instead, users who issue a new transaction must approve two previous transactions leveraging Proof of Work (PoW). Transactions on the network are therefore conducted without the issuance of fees, i.e., microtransactions.
IOTA is built on Tangle-an open, feeless, and scalable distributed ledger designed to support the seamless transfer of data and value. Thanks to Tangle, IOTA is quite scalable, handling up to 750 transactions per second. Also, the more users on the network, the more the network is scalable.
Solution to Scalability
Scalability is a massive challenge for significant cryptocurrencies, including Bitcoin and Ethereum. Nonetheless, experts have proposed various solutions to the scalability problem. A unique solution to Bitcoin and Ethereums scalability is the Lightning Network, which uses channels and nodes in the crypto network to enhance scalability. Essentially, the Lightning Network is a “layer 2” scaling protocol that runs parallel to the network to accomplish fast transactions. Other proposed solutions to cryptocurrency scalability issues are increasing the block size to eight megabytes and transferring a transaction signature from a block to another, i.e., SegWit network on Bitcoin.
Closing Words
Scalability is undoubtedly one of the most significant challenges facing cryptocurrencies and has lacked a permanent solution. However, not all cryptocurrencies suffer from scalability issues as some have implemented various mechanisms to overcome the scalability issues. However, the Blockchain Scalability Trilemma means that a cryptocurrency cannot be highly scalable and still be fully decentralized or highly secured. As such, most of the highly scalable cryptocurrencies, such as Ripple and EOS, have heard security incidents in the past. Therefore, you need to be cautious when investing in any of the highly scalable cryptocurrencies discussed above.