Whether you have doubt about them, shun them or recognize them, Bitcoin and Blockchain gradually became an integral part of our lives. Blockchain is still in need of improvement.
1.1. BLOCKCHAIN’s existing fundamental challenges
a. Transaction volume
The number of requests that a system will process within a unit of time is one of the greatest challenges for present blockchain platforms. The average bitcoin processing time is 7 transaction per second. The average Ethereum processing time is 15 transaction per second. This is a humble figure against VISA’s processing capability of 24.000 transaction per second.
In 12/2017, CryptoKitties, a simple operation app, significantly lowered Ethereum’s processing speed and and catapulted transaction fee. In the same month, Bitcoin witnessed a skyrocketing in transaction volume due to price surge, turning down the whole system’s processing speed and dramatically intensify transaction fee.
In light of those incidents, it is safe to conclude that existing blockchain platforms shares a critical drawback: a sudden increase in transaction volume shall result in increased fee and decreased transaction processing time.
b. Block time
The average bitcoin block time, or the average bitcoin transaction processing time, is 10 seconds. The average Ethereum block time is 10 – 20 seconds. This also is the time taken for a transaction to be processed.
c. Transaction fee
Bitcoin transaction fee reached a record high $55 in 12/2017, while Ethereum’s transaction fee reached its record at $1 in the same time frame. As of now, these figured lowered to $1,36 and $0,46, respectively. Root cause? The limited number of transactionprocessing node against the sky-high number of number of transaction, causing transaction processing fee to propel upward. Bitcoin investors were forced to accept the high price because low one may cause their transactions to be pending for, say, weeks to months. Transactions with higher prices are always prioritized for processing. Elevated cost of use turns out to be one of the barriers that prevented blockchain from becoming a popular application. It also puts a lot of strain on programmer in developing free apps.
The demands for free access and usage from users are ever-increasing, just like with website and mobile app. Similar to Internet, blockchain technology needs support for 4 free apps, helping blockchain to be widely applied, which, in turn, providing programmers and businesses more opportunities to create new services with value instead of requiring users to pay a free for the use of blockchain network.
d. Consensus algorithm
The use of proof-of-work consensus mechanism created a competition between computers, leading to compute capacity and power-consuming issues. At the moment, bitcoin transactions’ validation fee exceeded an average city’s power consumption, causing heavy waste.
e. Cross-chain transaction
As of now, cross-chain asset transfer have not been available on any existing blockchain platforms. The solution for asset transfer between different chains was the key for blockchain technology’s applicability.
f. Block size
VISA’s transaction processing speed in 2015 is around 92 million transactions, which would consume roughly 47 TB of storage should this be converted to blockchain. This exceeded a conventional computer’s storage limit.
Existing blockchains are quite complicated to use. Most of them aims at those with sufficient knowledge about blockchain instead of non-experience users. For example, smart contract programming using Solidity on Ethereum is quite complicated and not for everyone.
To attract more user, current blockchain platforms should apply a simplicity philosophy and an use-friendly approach, similar to recent popular websites and mobile apps.White-Page-IZIChain-Final-EN