Being the most prominent and widely spread cryptocurrency, Bitcoin does not have many issues dominating the market. It is the most valuable digital assets and, despite being far from the $20,000 it reached last December, Bitcoin remains as the most desirable investment in the industry. Each passing day, more and more sites and commercial establishments accept Bitcoin as a payment method.
However, it is also evident that Bitcoin has a scalability problem. Its network, that implements the Proof-of-Work (PoW) system, has a minimal amount of processed transactions per second. The average block creation time is 10 minutes, which limits the final throughput to nearly eight transactions per second.
The Bitcoin blockchain’s scalability pales in comparison with lots of other networks. For example, Ethereum can process an approximate of 15 transactions per second with recent announcements that the system will be scaled up to 500 transactions per second thanks to the implementation of the mass-transaction validator ZK-SNARK. Recently, an Australian blockchain performed 30,000 transactions per second in its latest test.
However, there is light at the end of the tunnel. This week, Bitcoin’s proof of work consensus system received great news from one of the most influential firms in the world. IBM Research, which is the tech company’s R&D branch, stated that it was found a way to reshape blockchain settings and architectures to see the so-called “sweet spot” to achieve energy efficiency, security, and scalability.
The Breakthrough, Explained
Basically, IBM is saying that Bitcoin has the potential to process significantly more than its current throughput. The investigation announced on Wednesday explained that applying the PoW system to the Internet of Things (IoT), blockchain nodes would run inside the connected gadgets or devices.
The primary issue was that IoT devices could vary significantly in computational power and energy resources, unlike most of the utilized Proof-of-Work mining hardware for digital assets, like GPUs and ASICs, among others. That scenario complicated things since IoT can range from miniature-sized gadgets to Internet-powered vehicles.
Since some devices in an IoT network may not be capable of solving the complex PoW calculus, IBM found incentives to make the PoW system a more efficient one when it comes to energy resources.
IBM stated that if the model is going to work, IoT devices on the blockchain need to use resources optimally, as well as energy.
IBM investigators used a simulated environment, splitting nodes into groups of 250 to 1,000 and letting an algorithm choose which proportion of each “population” needs to engage into mining, which would depend on the power that each node implements and the security required. The explained approach gets results while maintaining satisfactory levels of energy consumption.
Dr. Emanuele Ragnoli told specialized site Coindesk that, up until now, we had seen blockchains as environments in which “flat” peer to peer systems have nodes that perform similar tasks. However, he highlights that it is not an ideal scenario if everybody does the same “type of job,” instead of proposing a layered ecosystem that promotes different tasks for peers according to their respective capabilities.
By: Andrés Chávez
