With the world of blockchain abuzz, technology enthusiasts are pushing for the decentralization of financial institutions.
This idea, in theory, appears to be the answer to fraud and shady government practices…
The people have spoken: big businesses ought to put their ledgers on the blockchain for accountability. Yet, there is one question remaining on the idea of this solution. Does blockchain have the scalability to support the nation’s transactions?
Asking the Experts
For perspective, let’s reference some statistics that Vitalik Buterin, co-founder of Ethereum, shared in his talk with AngelList’s Naval Ravikant in December 2017. According to Buterin, a young blockchain legend, Ethereum is currently able to process five transactions a second.
At capacity, the platform completes six transactions per second, compared to Bitcoin’s average of three. Looking for a national comparison, Visa processes 24,000 transactions per second.
With these statistics, Vitalik has claimed his Ethereum blockchain may never replace centralized cloud computing due to scalability, but will reach Visa’s scalability over the next several years.
Yet with technology’s current exponential advancement, nothing is definite, and there are no limitations on what type of infrastructure may be built over time with blockchain programming.
“Unfortunately, existing blockchain applications are far from satisfying the scalability requirements to compete with centralized systems. Current mainstream payment processors, such as Visa, support orders of magnitude higher peak transaction throughput and incurs much lower latency compared to the operational Bitcoin platform.”
Speed vs. Security
Financial organizations like Visa use cloud computing to scale the tens of thousands of transactions done daily. Fast, yet not as secure as blockchain, as cloud computing carries severe privacy risks. Handing sensitive information to a third party can be messy.
Just ask Equifax, who is facing stiff fines from the United States Senate for last year’s security breach. This mishap compromised 145.5 million Americans’ social security numbers and birthdays. Blockchain comes with secure use cases in several industries.
“If companies like Equifax can’t properly safeguard the enormous amounts of highly sensitive data they are collecting and centralizing, then they shouldn’t be collecting it in the first place.”
— Mark Warner (D-Va.)
The Future of Blockchain Scalability
With the way technology is advancing, nothing is definite, and there are no limitations on what type of infrastructure can be invented. Software development is growing exponentially within the blockchain space.
According to The Upwork Skills Index, blockchain development ranks second of the 20 fastest growing job skills.
With every new developer that enters the blockchain space, potential grows for an innovative system to solve growth in transaction time, scalability, and much, much more. #TheseAreFacts