[UDC Report] For scalability, they can throw out the blockchain
[UDC2019 Report]-3 Scalability is a core factor in implementing blockchain to everyday services. Scalability refers to the ability to flexibly react to an increase in users. Scalability arose an issue in the blockchain industry in 2017, when the number of users shot up in a short period of time. Doesn’t have to be public With the end of the cryptocurrency boom in 2018, a realistic solution became mainstream. Around this time, enterprise blockchain garnered attention with global companies embarking on blockchain projects using their own infrastructure. In Korea, Kakao’s blockchain affiliate GroundX’s cryptocurrency project Klatyn is at the lead of corporate-led blockchain businesses. Klatyn officially launched in June 2019. The next month, nine Blockchain Applications (BApp) that were to work with Klaytn started services. The system works differently compared to public blockchain services that pursue total decentralization. The so-called “partial decentralization” offers enhanced processing speeds and higher efficiency while maintaining the transparency of a public blockchain. “Klip, our digitial crypto asset wallet, will launch on Kakao this year,” said GroundX CEO Han Jae-sun at the Upbit Developer Conference (UDC) 2019 on Sept. 4. Focus on distributed ledgers On the contrary, one project is establishing a platform using digital ledger technology (DLT) without blockchain. Introduced at UDC 2019, Hedera Hashgraph does not use blockchain in its decentralized public network. Instead of verification using the PoW, PoS or DPoS systems used for blockchain, Hedera uses a consensus algorithm built on Hashgraph, for which 39 organizations and enterprises oversee governance. IBM, Boeing and Nomura Holdings are among its members. Hedera Hashgraph also applies a Directed Acyclic Graph (DAG) called Gossip Protocol to overcome the blockchain’s “trilemna”— a term that refers to blockchain’s fundamental limit to achieve scalability, decentralization and security all at once. The company’s co-founder and chief scientist Dr. Leemon Baird explained at UDC 2019 that Hedera Hashgraph’s consensus-based service can help obtain high levels of functionality, credibility, fairness and privacy. Staying user-friendly Of course, there are improvements to be made. Above all, the main question is about the essence of scalability. On this matter, the blockchain industry is still discussing temporary protected status (TPS). Solely talking about TPS, there are blockchain projects that surpass the TPS of Visa, at approximately 3,500 TPS, and Mastercard, at around 2,000 TPS. But most of these projects had to limit decentralization and security on behalf of obtaining TPS. From a similar perspective, some say Hedera Hashgraph’s gossip protocol is also weighed on TPS and therefore will not last long. The DAG method, including Hashgraph, has the issue that one transaction requires the verification of two transactions. To confirm one deal, there needs to be two deals for a valid verification. Hedera Hashgraph aims to solve this old issue in DAG by using the median value of verification transactions. But this method comes with fundamental concerns that deriving a median value can hurt integrity. At this stage, the focus should not be on devising a scalable project, but devising scalability in a way that can offer user-friendly services. ※UDC 2019 videos and presentations can be found at https://udc.upbit.com/program/detailed_program, also the full report can be found at https://static.upbit.com/reports/udc2019_report_en.pdf. This report was sponsored by Upbit, and the information in it is based on the Upbit Developer Conference held at Grand Hyatt Incheon on Sept. 4 and 5.