Second generation blockchains were presented as being faster, cheaper, and more scalable than Bitcoin. Third generation chains (basically anything that came after Ethereum) promised even greater optimizations.

In the event, these networks have run into the same difficulties as Bitcoin, with competition for scarce resources leading to mounting costs and congestion. To tackle these problems, an array of scaling solutions has been proffered – some of which could also benefit UTXO blockchains such as BCH and BTC.

Also read: 80% of Crypto Trade Volume Tracked by Blockchain Surveillance

The Great Scaling Debate

At the annual Ethereum developers’ conference in Osaka last week, most of the talks were about scaling. So was a good chunk of the informal talk between delegates, many of whom have grave concerns about Ethereum’s ability to meet growing network demand.

 Eth 2.0, the much-vaunted upgrade that will involve a transition from PoW to PoS, is still years away, with many Devcon attendees conceding that it may never happen.

This impasse has prompted rival smart contract chains such as Qtum to position themselves as more scalable alternatives.




This year’s Devcon was held in Osaka, Japan.Over on EOS, there are similar problems stacking up. Unlike Ethereum, EOS isn’t really gunning for the decentralized finance crown, but it does share one thing in common: growing demand for finite resources.

On Ethereum, those resources manifest as block space which pushes up gas prices. On EOS, it takes the form of computational resources: RAM (virtual storage) and CPU, which is the amount of time a block producer will allocate to transactions from a particular account.






Ethereum gas prices rose sharply last monthRising and erratic computational costs on EOS have forced developers to seek scaling solutions of their own.

The architecture of blockchains such as Bitcoin, EOS, and Ethereum differs substantially, but this much holds true: onchain resources are limited and there is an open market competing for space.

Just as your car moves more slowly and is less fuel efficient during rush hour, at peak times on crypto networks, your transaction is likely to be slower and more expensive. Fixing this problem calls for some out the blocks thinking.

Current EOS costs according to EOS Resource Planner

Virtual CPU and Offchain Transactions

For EOS, scaling salvation has come courtesy of Liquidapps, whose vRAM product has now been complemented by a vCPU counterpart. This approach involves taking these precious resources off-chain to a separate network of nodes that perform the computation at low cost, before broadcasting the verification to the EOS main chain.

Although currently being provisioned on EOS, the same technology can be applied to Ethereum, or even to Bitcoin Cash, for developers seeking to create decentralized applications that require access to cheap storage.

For Ethereum, the scaling solution presented as the likeliest to succeed is Plasma, which can handle hundreds of transactions per second, and now supports smart contracts.

As co-founder Jinglan Wang puts it, defi projects saying they don’t need Ethereum scaling solutions right now is like a New Yorker saying they don’t need a Metrocard in rush hour. Plasma is a layer two solution, whose BTC analogue is Lightning Network.

Dapp Developers Must Choose Wisely

Developers pondering the best network on which to launch decentralized applications have some tough choices.Ethereum has a large ecosystem of users, devs, and companies, but it’s running near capacity, and network fees have been rising for months. Scaling solutions such as Matic can help.

EOS provides free transactions at the point of access, making it more consumer-friendly, but popular dapps risk landing their developers with rising computational costs. Secondary solutions such as vRAM can mitigate this however.

Qtum has just undergone its first hard fork, adding a new EVM that’s enhanced its smart contract capabilities, while retaining the UTXO model first pioneered on Bitcoin. It’s basically Ethereum without the scaling problems, albeit with a smaller ecosystem at this point in time.

Horizontal vs Vertical Scaling

Taking transactions offchain, be it to a sidechain or layer two, is not without compromises. Generally speaking, there is a reduction in decentralization and in transaction finality.

The architects of these solutions stress that a micropayment doesn’t need the same level of security and trustlessness as a $1 billion BTC transaction.

Gaming and gambling dapps, for instance, are fine to use a product like Liquidapps’ vRAM for offchain storage, or Plasma for low-cost transactions.To return to the traffic analogy, side streets can be used to skirt the traffic snarling up the freeway, but they’re not designed to support 16-wheelers.

Blockchain scaling solutions can therefore be more accurately described as scaling options: choices that will be suitable for some projects, and unacceptable to others.




Vertical scaling is the process of increasing throughput by increasing block or node capacity. It’s the approach taken by Bitcoin Cash, for instance. The solution to Bitcoin blocks becoming full, its proponents argue, is simply to add a couple more lanes to the highway.

It’s a simple approach, but one that has proven very effective so far. Horizontal scaling entails taking as much of the load off the main chain as possible, pushing it out to third party solutions that add extensibility.

Despite the millions of dollars and tens of thousands of hours poured into blockchain scaling, the truth is, we still don’t know which solutions will prevail. Bigger blocks; more sidechains; building up the stack; developing horizontally.

Through trial and error, discourse and debate, a path will be found to make blockchains ready for the mass adoption that all crypto advocates see as inevitable.

In the here and now, though, the architects of so-called next-generation blockchains are learning a lesson that bitcoiners learned long ago: onchain, there’s no such thing as infinite scalability.

Which blockchain scaling solutions do you believe have the best chance of success? Let us know in the comments section below.Images courtesy of Shutterstock.

Did you know you can verify any unconfirmed Bitcoin transaction with our Bitcoin Block Explorer tool?

Simply complete a Bitcoin address search to view it on the blockchain. Plus, visit our Bitcoin Charts to see what’s happening in the industry.

Microsoft is very proud of its Azure Blockchain-powered smart contract auditing tools for Ethereum – so much so it decided to flaunt some of the benefits of the software in a new blog post.

“One of the key drivers making blockchain-based applications programmable, accessible to enterprise customers, and able to meet the diverse needs of a variety of sectors [are smart contracts],” the post reads. “They foster trust in adversarial environments, but also make it challenging to secure compared to traditional code.

”But worry no more, the software Goliath believes it has the solution to this quandary: Verifier for Solidity (for those out of the loop, Solidity is a programming language specifically developed for Ethereum) – or VeriSol for short. The tool, which pairs with Azure’s blockchain suite, purportedly streamlines the code auditing process with automated security checks.

“VeriSol allows us to iterate more quickly because of the automatic and continuous checking, and it allows us to catch bugs faster without having to worry about potentially affecting customers,” said Azure Blockchain engineer Cody Born.

IT professionals have often downplayed the effectiveness of automated security checks, but Microsoft insists there are several reasons why smart contracts are an exception to this rule.

“The modest code size and the sequential execution semantics of smart contracts make them amenable to scalable verification, and the open operating environment substantially reduces the need to manually model the environment in which a smart contract operates,” said Microsoft principal researcher Shuvendu Lahiri.

“The use of formal verification for production software requires individuals skilled in highly specialized formal languages and tools, which imposes on development teams a steep learning cost and often several person-years of investment to break down the highly sophisticated task of verification into those that can be discharged mechanically by the verification tools,” he continued.





Credit: MicrosoftMicrosoft is quick to point out that VeriSol, which was first unveiled in April 2019, is still in a prototype phase. Still, its research team is pretty bullish on the future of the software. 

“We envision empowering not just Azure Blockchain developers and customers, but contributing to a full blockchain ecosystem that is safer and helping people realize the full potential of the technology without being plagued by the costly mistakes in smart contracts,” Lahiri said.

Those interested in a more technical breakdown of VeriSol can check it out on GitHub – it’s all open source.

Microsoft might be a bit too enthusiastic about blockchain

Curiously, Microsoft cites research by consulting firm Gartner, which suggests blockchain tech can bring businesses added value upwards of $360 billion by 2026.

Coincidentally, it makes no mention of another recent report by Gartner which speculates that 90 percent of enterprise-grade blockchains will soon be obsolete – unless they roll out significant upgrades by 2021.

Speaking of enterprise distributed ledger tech, Microsoft has been dipping its fingers all over the decentralized software market. It has developed a number of software suites for building decentralized tech, like its cloud-based blockchain development kit, Visual Studio for Ethereum dapps, and a decentralized digital identity management system.

So far, the Redmond giant has provided blockchain solutions to a bevy of high-profile firms, including banking behemoth JP Morgan Chase, EY, and Nasdaq.

The Bill Gates-founded company even helped Louis Vuitton put its overpriced rags on the blockchain recently.

Say what you will, but for a company that blocked nearly 5 million cryptocurrency-related ads in 2018, Microsoft is really not shying away from blockchain. Guess we can add the Windows-maker to the growing list of corporates ruling by the “blockchain, not Bitcoin” mantra.

Getting funding for their startups is not an easy feat for blockchain entrepreneurs.

Despite the rising prevalence of blockchain in today’s world, it still isn’t enough to push blockchain at the forefront of investment. More startup companies are turning to outside funding in order to gain the money they need to run their digital business.

Unfortunately for them, it's not that easy to ask investors to fund a blockchain startup. This is what blockchain investors look for in a startup before they decide to take the plunge.

Real innovation
Blockchain may be an innovation all in itself, but that isn't enough for investors who want real innovation from an individual company. Real innovation, in this case, can be defined as something new and unique that a company has managed to come up with using current or upcoming technology.

Blockchain is a technology that can potentially contribute to the modernization of our businesses and our economy. And it's involving very fast.Based on this statement, it would seem like investors are the ones not having enough projects to invest in.

If entrepreneurs can focus more on developing their blockchain-capable businesses more, they will be able to attract investors who are specifically looking for something new created out of blockchain technology.

Tech connectivity
Investors are not interested in using blockchain in isolation. They are interested in seeing how blockchain can be used in relation to other technology, such as artificial intelligence, for instance.Although both have remained as standalone technologies in the last decade, more and more academics have been trying to combine the two.

The convergence of blockchain and artificial intelligence could lead to several benefits in various sectors, including healthcare and finance, the two sectors that see the most identity fraud cases in recent years.

With blockchain and AI integrated together, companies in these sectors can create an encrypted method of storing sensitive data that can then be securely unlocked using the knowledge and sophistication of AI.

This is just one example of the way blockchain can be used to improve existing technology and even create an entirely new technology altogether.

Useful solutions
Investors are also interested in a startup that can suggest and develop useful blockchain solutions that even the mainstream public can accept and adapt.Many companies use the word blockchain as a buzzword in order to entice investors, which is why many investors tend to avoid those.

These investors prefer companies or projects building something with the core value that comes from a set of functions native to blockchain and cannot be attained in the absence of blockchain.

Valuable data
Another thing that investors look for in a startup is valuable data. Valuable data can lead to valuable discoveries, and at the same time, help create projections and forecasts for specific startup products. Like any serious investor, most investors prefer to invest in a product when it’s still fresh on the market, as long as its forecasts are positive.

One of the biggest problems with blockchain startups is that they try too hard to look for problems to solve, instead of solving problems that are already in front of them. Investors want someone with a clear vision for what they're building, a balanced skill set, and an ability to get things done.

Attentive Founders
Lastly, investors are attracted to startups with founders who are attentive to industry happenings and are quick to adapt their business based on current situations.

The reason for this is two-fold. One, staying updated on whatever's happening within the industry ensures investors that the founders themselves are interested in blockchain and are thus motivated to improve the sector.

Two, knowing how to adapt to remain sustainable and profitable is extremely vital in running a business in the digital realm.Just using the word blockchain in your business proposal is not enough to secure funding from investors. If you can integrate all these factors that affect the decision-making process of investors, you'll stand a better chance of getting your company funded.




Chris Porteous

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I'm a serial entrepreneur and owner of three internet ventures, including My SEO Sucks. A contributor to ZeroHedge, Entrepreneur.com, Forbes, Inc.com, and dozens of other media outlets, I believe in SEO as a product. I developed a proprietary technology fueling the #1 rankings of My SEO Sucks clients. In guest speaking ventures across North American, I advocate for organic search traffic as the backbone of any comprehensive digital marketing strategy.

To help developers at new blockchain startups, and at companies seeking to start using blockchain, IBM has developed the IBM Blockchain Platform Starter Plan to help them build blockchain proof-of-concepts quickly and affordably.

It offers an end-to-end blockchain development experience: a secure test environment, a suite of education tools and modules and one-click network provisioning. It is built on the open source Hyperledger Fabric.



IBM logo.  (Photo by Chesnot/Getty Images)

More than 2,000 developers and tens of thousands of transaction blocks used the Starter Plan in a three-month test environment, said Jerry Cuomo, vice president of blockchain technology at IBM.

The Starter Plan is for enterprises -- whether startups, large corporations or government agencies -- that want to understand and use blockchain technology, Cuomo said.

It is designed to make the technology disappear so developers can focus on their ideas rather than how to operate a test network.

“Starter is to provide the developers and test environment with single click deployment to enable an aspiring blockchain developer to get started,” he said. “When we put it out there as a beta in March of this year we saw very quick and significant adoption.

We had over 2000 smart contract contributors, developers building contracts on the platform and deploying smart contracts of every variety imaginable,” he added.

The Starter Plan attracted some companies he describes as “born on the blockchain” including Road Launch for logistics, Mediaocean, which automates and tracks digital ad buys, and Global Debt Registry, which helps institutional investors and warehouse lenders manage risk, improve efficiency and pricing in the credit markets by providing solutions that ensure the integrity of a loan asset.

“The Starter Plan is a great place to start because it offers low cost and high value, with the tools we provide on top of open source,” Cuomo said.

For now the plan runs on the IBM cloud although he suggested it may be available on other clouds in the future. Continue to page 2 on Forbes here: https://www.forbes.com/sites/tomgroenfeldt/2018/06/28/ibm-launches-starter-kit-for-blockchain-develo...

Dr. Greg Colvin and Alex Leverington, developers of Ethereum DEV, have joined the Lunyr team as technical advisors. Lunyr’s token crowdsale begins on March 29, 2017 at 16:00 UTC.

Lunyr is an Ethereum-based decentralized crowdsourced encyclopedia which rewards users with app tokens for peer-reviewing and contributing information. Lunyr has announced that Alex Leverington has joined the team as a technical advisor. Alex has been involved with Ethereum as a core developer since the very beginning.

He worked at ETHDEV, where he architected and programmed devp2p, Ethereum’s underlying P2P protocol layer. Alex has made key contributions in Ethereum encryption and security, primarily touching the various communications protocols. He remains active in the protocol steering group.

Last week, Dr. Greg Colvin, who works on the Ethereum Virtual Machine (EVM) for Ethereum DEV, also joined the team. His work includes pushing the boundaries of EVM performance and evolving the EVM architecture and Ethereum specification. Greg has had decades of technical experience inventing algorithms, designing systems, and programming applications and servers. His experience includes building and leading world class teams...continue reading: https://news.bitcoin.com/ethereum-dev-developers-join-lunyr-team-as-technical-advisors/?utm_source=O...

Cryptography, it’s all around us, and it’s here to stay. My name is Carsen Klock, I am a developer, designer, and crypto entrepreneur. I want to share several things I’ve learned about developing cryptocurrency with you.Back in 2013 and 2014, I created a plethora of altcoins, aka. cryptocurrencies based off the Bitcoin Core source.

Specifically at that point in time, version 0.8. Going into crypto I saw a lot of coins that were just blatant copies of Bitcoin, Litecoin, with no new innovation.During this time, I saw a gap in the cryptocurrency industry. A very large gap between; innovation, and scams. I decided to create several coins that helped to change the industry for the better. I had invented the X13, X14, X15, and FRESH (NIST5) hashing algorithms and python mining modules. Unfortunately a lot of coins that I had implemented these features with, were more so small projects to test these new algorithms.

With the PoW consensus methods, most of my coins failed due to a lack of consistent development on my end and a huge amount of FUD within the Bitcoin community. I had also created the first working PoS transition hybrid coin where after a set amount of blocks the coin would transition from a Proof Of Work consensus to a Proof Of Stake.

These consensus methods are still very controversial, PoW or PoS? We can see this now with the crypto called Ethereum. In my opinion the PoS consensus method is flawed, the rewards are low, miners are cancelled out, and the rich get richer...continue reading: https://themerkle.com/my-experience-as-a-cryptocurrency-developer/?utm_medium=push&utm_source=onesig...