Is it impossible to have problem free innovations? Not without a doubt, because there have been innovations without problems. However, most of them always have room for development.

For blockchain technology, one of its major issues is scalability. Scalability has been one prevalent issue in the blockchain community since the early days of the Bitcoin cryptocurrency. Well, we refer to Bitcoin, because it popularized the blockchain technology.

Would this technology be sustainable on a global level? What happens when the number of users increases? Will it be able to handle the adoption rate seamlessly? All these and more were questions in the blockchain community, which they soon found answers to as the technology became popular.

This article discusses the scalability problem of blockchain technology, as well as solutions and future developments.

Understanding Blockchain's Scalability Issues

To grasp the scalability problem of the blockchain technology, we'll start from the genesis — Bitcoin. Bitcoin is virtual money created on a blockchain that allows for sending and receiving virtual money. However, Bitcoin had a limited storage space and bandwidth that could handle certain transactions at a fast rate, while still maintaining decentralization and security.

The scalability issue grew when the Bitcoin cryptocurrency gained popularity and usage. The number of users grew, and the bandwidth and storage couldn't keep up. As a result, transaction speeds decreased, the blockchain started getting clogged, and transaction fees increased.

Different attempts to correct this problem started surfacing as other cryptocurrency blockchain, but they still ran on the Bitcoin code, so they encountered the same problems.

Blockchain technology has grown from an enthusiast's fancy to a widely accepted technology whose uses have expanded beyond the financial industry to other areas of the economy. With such widespread adoption, it is vital for the blockchain community to find lasting solutions to its scalability issues.

Likely Solutions To Blockchain Scalability

To better appropriate the right solution for the blockchain scalability problem, you first need to understand a crucial term called the "Scalability Trilemma."

Source: Reddit

Blockchain's scalability trilemma suggests blockchain cannot fully sustain scalability, security, and decentralization at the same time. One will have to go at the expense of the others.

For example, on the Bitcoin blockchain, for a transaction to be called valid, an agreement has to be reached by all the nodes on the network. This means that the higher the number of nodes on the network, the more time required to validate a transaction.

The blockchain’s scalability continues to deteriorate in order to maintain decentralization and security as nodes increase. Therefore, the best solution for the blockchain scalability challenge is to discover one that allows the blockchain to remain decentralized, safe, and scalable.

Because Blockchain technology has already gained global recognition, the number of players involved in finding a solution to the scalability problem has exponentially increased. The most promising solutions among all those offered may be classified into four categories:

• Layer one proposition
• Layer two proposition
• Improved Consensus
• Adopting other Distributed Ledger Technologies (DLT)

Layer One Proposition

The first attempt to fix the scalability problem was to make adjustments to the main network. Changing attributes like each block's capacity or drastically reducing block verification time. This fix is known as layer one solution or on-chain scaling, since it is hinged on the base layer of the blockchain network.

There are different layer one remedies, but the most popular are Hard Fork, Segregated Witness, and Sharding.

Layer two Proposition

This solution stemmed from an upgrade to the layer one solution. If the layer one solution is based on the main chain, layer two solutions talk about taking the workload off the main chain by creating a subsidiary chain that handles most of the transactions, leaving more breathing space for the main chain.

Just like layer one solutions are called on-chain scaling, layer two solutions are also called off-chain scaling. There are different proposed layer two solutions, but the common ones are side chains, state channels, lightning network, and plasma.

Improved Consensus

The word "consensus" is an integral part of the blockchain network, as it is what supports the decentralization of the entire network. Since the current blockchain network is facing scalability issues based on the current consensus system, PoW, it is only logical to find a better way to come to a consensus on the network.

There are different scalable consensus structures, some of which have been proposed are Delegated Proof-of-Stake (DPOS), Proof-of-Authority, or Byzantine Fault Tolerance (BFT).

The Ethereum blockchain, a blockchain used for more than exchanging value to housing decentralized applications, has shifted its consensus structure from the Proof-of-Work structure to the Proof-of-Stake structure, in a bid to combat its scalability issues.

Adopting Other Distributed Ledger Technologies (DLTs)

This solution might appear last on the list, but is just as important and can be an effective last resort to solving the scalability problem. Blockchain technology falls under a bigger scope of technology called Distributed Ledger Technology. All technology under the DLT scope, are also decentralized in nature.

Therefore, the idea of introducing another DLT that is far scalable, has a higher processing speed and transaction throughput, could just be the way forward. And one of those DLTs is the Directed Acyclic Graphs (DAGs). DAGs use a different data structure from the blockchain that is linear in nature and asynchronous in operation, making it possible for it to process literally unlimited transactions.

Moving Forward

The blockchain technology has continued to experience a wide adoption rate, with its acceptance and application cutting beyond the financial sector, into other sectors of the economy. This rapid adoption increases the number of players on the network, thereby increasing the scalability problem.

Before, it was a matter of huge concern, but the resurgence of these potential solutions comes with a breath of fresh air. Blockchain's many applications have made it very important to proffer solutions quickly to its trilemma. While it is not there yet in terms of global sustainability, it is safe to assume that it will eventually get there.

It will take a lot of trial and error, but the perfect solution will definitely emerge. On a global scale, blockchain technology has immense value to offer, and if the scalability problem is effectively addressed now, we’ll be entering a new age of impossibilities made possible.