Pre-History of Blockchain Scaling: Stateful Channels, DPoS, Large Blocks and Sidechains

Blockchain Scaling Enters the Layer 2 Era, How are the Early Scaling Solutions Evolving Today?

Pre-History of Blockchain Scaling: Stateful Channels, DPoS, Large Blocks and Sidechains

In a blink of an eye, 4 years have passed since the word “scaling” entered the public’s attention in 17 years.

In the past 4 years, countless teams have made great efforts to scale the blockchain, some of them have worked to improve the scalability of bitcoin or ethereum, while others have simply started their own business to achieve better and faster bitcoin or ethereum without technical baggage.

With the launch of Arbitrum’s main website, we have reached the penultimate chapter of the “Scaling” book. I believe that in a few years, along with the “final chapter” of ETH2.0 Shard + Rollup, scaling will no longer be the main theme of blockchain technology development.

Before the final chapter, let’s briefly review those scaling solutions that we have chased together in the past few years.

Channels: Lightning Network, Raiden, Celer, Connext

When it comes to scaling, channel may be the first word that pops into the heads of many veteran players.

The earliest scaling technology should be considered the Bitcoin Lightning Network, then there was the similar Raiden (Thunderbolt Network) on ETH, including later projects such as Celer.

As the earliest scaling solution, the Lightning Network is undoubtedly a “failure” in terms of development time and today’s data, and Raiden is the weakest of the ETH scaling solutions.

The reason is that the principle of the channel technology is to open multiple micro-payment channels between the two sides of the transaction to connect to each other and form a network, which is most of the time only suitable for high-frequency transaction scenarios with fixed transaction objects, and the channel nodes need to pledge amounts, due to the different pledge amounts, it is very easy to form different routing bottlenecks and lead to transfer failure.

The lightning network was particularly hot in 17 years with a video explanation and derivation that as the number of channel nodes grows, those medium and large nodes, that is, nodes with larger pledge amounts, will become more and more popular because they will not cause routing bottlenecks. And those nodes with small amounts will be phased out.

Very simple, if you want to transfer 10 BTC between A to Z through the lightning network, then the route of the B,C,D and other lightning nodes, the BTC balance of more than 10 will be selected, less than 10 natural to bypass. In the long run, it is easy to deduce that the lightning network will slowly and spontaneously evolve and converge to a most efficient way, that is, a few mega nodes involved in almost all the routes.

Hmm? How is this different from our traditional user-bank-user? Aren’t these mega-nodes the banks? Is this still the main focus on decentralized blockchain and bitcoin ?

The reason is that ETH is currently severely fragmented by Layer2, and if it is not possible to form a dominant situation in a short period of time, then building a state channel network between several Layer2s will alleviate this “fragmentation” to a certain extent, and will instead become an essential technical solution.

But in any case, the channel technology is destined to serve as an “auxiliary position” of the expansion program, not standing in the front row, not to mention the C position.

DPoS: EOS, Tron, BSC

EOS, Tron, as the most famous “ethereum killer” in 17-18 years, its technical core is undoubtedly DPoS, which has spawned many other DPoS and DPoS variant series of high-speed chains, and now the famous BSC, which also uses DPoS.

DPoS was actually first proposed by Bitshare in 2014, but it was EOS that entered the mainstream in 17 years.

EOS has been controversial since its launch, with critics accusing the 21-node design of being “decentralized” both in terms of number and hardware requirements, while proponents argue that this one-coin-one-vote mechanism is most in line with the current stage of “representative democracy” in human politics, and counter that the number of influential large mining pools in BTC PoW is actually less than 21.

Objectively speaking, EOS still brings many new ideas to the blockchain, such as converting the CPU and memory of the whole network into resources that can be bought and sold, being the first blockchain with a “constitution”, proposing the concept of arbitration committee court, and taking the concept of “on-chain voting” deep into people’s hearts ……

Of course, these have nothing to do with scaling, so let’s put them aside for now.

The biggest feature of DPoS in the field of scaling is that it allows 21 “high-performance super nodes” to handle all transactions, including packing, blocking, verification, and so on.

Here is a concept to emphasize, that is, “high-performance super nodes”, which you will often see later when we talk about other scaling solutions.

DPoS is still essentially PoS, but different from ordinary PoS. In order to improve the performance and TPS of the whole network, the requirements of DPoS for nodes are countless times higher than the previous PoS, requiring nodes to have super high computing performance and sufficient bandwidth to improve the processing power of the whole chain and the communication speed between nodes as much as possible, which is equivalent to eliminating all the short boards in the traditional PoW and PoS barrel theory and using only 21 boards of basically equal length and sturdy to make the barrel.

The 21 nodes of DPoS are elected by the Token holders through on-chain voting.

The later variants of DPoS, LPoS, BPoS, NPoS and other consensus mechanisms, as well as many new public chains – such as IOST, Algorand, etc. – actually have the shadow of EOS, except that the number of nodes is no longer 21, the D in DPoS is removed, and the nodes are generated by proxy voting instead of direct voting, or by verifiable random function designation, etc. The hardware requirements for nodes are not as “sick” as EOS, but high performance is still a must.

It is interesting to note that the most capable of all these “XPoS” is the youngest, almost nothing original, but simply Forked ETH and then changed the consensus mechanism from PoW to DPoS of BSC, I don’t know if it is an irony.

But anyway, high-performance nodes from the DPoS era of EOS, is officially entered the blockchain “miner” class, not only tends to centralize, but all blockchain projects, will exist.

Big Block: BCH, BSV
Big Block is a more “intuitive” way to expand capacity than DPoS.

Since the TPS is so low now, the main reason is that a block can accommodate too few transactions, so I expand the block 10 times, or even 100 times, from 1M to 10M, 100M, or even 1G, the TPS will be expanded 10 times, 100 times, or 1000 times accordingly.

The big block is mainly around the BTC expansion, not related to ETH, but also the birth of the famous BCH and BSV fork in the history of the blockchain, the three camps war of words for more than a few years, basically no one can convince anyone, quite a sense of the “Christian” fork.

Among them, BCH is the “moderate big block” school, which believes that the block size should be gradually increased with the demand of the network and the technological progress of the Internet, while BSV is the “extreme big block” school, which has raised the block size to a large size from the beginning, and later even opened the “unlimited block” expansion scheme.

However, simply increasing the block size is not as simple as one might think, as the stress test of BCH in late ’18 saw 16% of all nodes dropped and unable to synchronize data, while in April ’19, the stress test of BSV resulted in the reorganization of 6 blocks. Node dropouts, block reorganization, orphaned blocks, and a host of other issues will gradually become apparent as individual block data (not the block cap) grows progressively larger.

Take BSV as an example, in BSV’s vision, the final mature form should be the super node style of EOS, even higher than EOS hardware and bandwidth requirements, almost data center level. Eventually, a few or a dozen “ultra-high-performance super nodes” will be left to be miners through the elimination of the best and the worst in the market. Only instead of voting, the PoW remains pure, emphasizing not the number of nodes or “decentralization”, but “Permissionless”.

You see, high performance nodes, here they are again.

Whether the use of high-performance nodes hurts decentralization, the most important feature of blockchain, is still a topic of debate, and big blocks are certainly a front-row representative of high-performance nodes.

The two projects also took completely different paths in the direction of smart contracts. BCH first started drafting a wormhole protocol, but later announced its failure and went back to the pure electronic cash route, and then after BSC caught fire, it started developing a side chain called SmartBCH, similar to BSC, taking the EVM-compatible route, which is said to be basically completed, and I believe we will soon be able to experience it.

SmartBCH’s competitors are the various sidechains of ETH and L2, while BSV has taken ETH itself as a competitor from the very beginning. I believe that it will take at least three to five years before the market will give a relatively definite answer as to whether the expansion of large blocks is feasible or falsifiable.

Sidechains: Matic, Skale, BSC, Heco, Near, Avax, Fantom

Strictly speaking, the sidechain itself is just a concept, not a specific means of scaling technology.

For example, the current Matic and Skale are side chains, both are PoS chains, their consensus mechanisms are different, but they both serve ETH, and their initial purpose is to expand ETH.

BSC and HECO are “trading platform chains” that directly Fork ETH and then change the consensus to DPoS, so many assets on ETH can cross over, so they can also be considered side chains of ETH.

Near is a slice, Avax, Fantom is a DAG …… and their initial position is a native high-speed chain. But regardless of the technical means, as long as they make a bridge to ETH, then they can be considered as ETH sidechains in a sense.

If there is a bridge made on top of EOS that connects to ETH, then you can also say that EOS is a sidechain to ETH.

Of course, the concept of sidechains is actually mutual. For example, if there is a parallel chain like Moonbeam on top of Boca, which is responsible for “bridging” ETH, at first there will be many assets on top of ETH that will be bridged to Boca, and you feel that Boca can be considered a sidechain of ETH.

But if one day the assets on the boca are richer than ETH, and the market value is bigger than ETH, and many native assets go from the boca to ETH through the bridge, can we say that ETH is a sidechain of the boca too?

So the sidechain itself is a mutual concept. But at present, ETH is basically dominant, almost all the valuable assets are in ETH, and ETH itself is weak, so it makes people feel that all the chains that “take the bridge to ETH” can be considered as side chains of ETH.

Each sidechain is an independent blockchain in itself. Performance, security, etc. all depend on the nodes of their own chain and have nothing to do with ETH. Being clear about the difference between a sidechain and Layer2 is a key question to test your understanding of blockchain scaling (specifically ETH scaling).

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/pre-history-of-blockchain-scaling-stateful-channels-dpos-large-blocks-and-sidechains/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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