Currently, most blockchains are limited in their ability to handle large numbers of transactions and big data. This is due to how most blockchains are designed to be decentralized, which means that every node on the network must store a copy of the entire blockchain. Thus, such a philosophy makes it difficult for blockchains to scale, as the size of blockchains grows infinitely over time.
As the number of transactions increases, the network’s capacity to handle them effectively can become constrained. The limitations arise from factors such as block size, block time, and consensus mechanisms used by the blockchain. Teranode, a scalable implementation of the BSV protocol, was able to overcome these hurdles in order to provide a stronger approach to scalability.
Blockchain protocols are rules that govern how a network operates. Teranode is designed to empower unbounded scaling for BSV to theoretically handle an unlimited number of transactions. Instead of storing the entire blockchain on every node, Teranode uses a system of “shards.”
Shards are smaller pieces of the blockchain that are distributed across a network of nodes, allowing Teranode to handle more transactions without increasing the size of the blockchain.A teaser of these features were shown during the third and final day of the London Blockchain Conference 2023 by Jake Jones, who is the Head of Network Infrastructure at the Bitcoin Association for BSV. He argued that Teranode’s sharding, including deploying horizontal scaling and microservices, can enable unbounded scaling.
Horizontal scaling and microservices
Horizontal scaling is the practice of adding nodes to a network to increase its capacity to handle more transactions. Adding more nodes expands the network and distributes the workload to improve performance and transaction processing capability. Each additional node adds to the network’s processing power, allowing for higher throughput and better scalability.
Meanwhile, microservices is an architectural style that breaks down a software application into smaller services that can be scaled independently. Rather than having a monolithic blockchain, microservices modularize the components of blockchain to enable flexibility and agility.
Microservices’ modularity allows for the development of services that can be updated or replaced individually without affecting the entire blockchain network. With that, the combination of horizontal scaling and microservices architecture in blockchain enables scalability, flexibility and maintainability of blockchain networks.
Unbounded scaling’s practical application
Jones first humanized the technical discussion with a simple parallel. He made the online streaming customers’ frustrations of having to subscribe to different platforms an example. Here, he asked the audience, “What if streaming services were using blockchain?”
“Currently, 80% of all internet traffic consists of video streaming. A world in which unbounded scaling-enabled blockchain technology is utilized for streaming would allow consumers to only pay for the specific shows or movies they want, rather than having to subscribe to multiple platforms,” said Jones.
Scaling refers to the ability of a blockchain to handle a significantly higher volume of transactions per second as compared to traditional blockchain networks. Unbounded scaling, on the other hand, means being able to scale constantly to meet market demands.
Through the consistent improvement of existing protocol and consensus mechanisms, the blockchain network could then handle a much larger number of streaming transactions simultaneously, not to mention bigger data sizes that allow for high-definition videos to be streamed.
Microtransactions and tokenization could also be utilized through a scalable blockchain. Microtransactions refer to very small amounts of payments that usually fall below the limit of popular payment processing channels, such as PayPal or VISA.
Because unbounded scaling makes it possible for transaction fees to be reduced to the barest of minimum (the BSV Blockchain averages a fee of $0.000003 per transaction), people can send payments of even less than a dollar.
This allows users to pay for specific shows or movies on a pay-per-view or per-minute basis. Without them having to pay for expensive transaction fees. Each stream can be tokenized, and users would only need to pay for the content that they consume—eliminating the need for traditional monthly or yearly subscription models.
The BSV Blockchain, upon restoration of the original Bitcoin design, was already able unlock unbounded scaling. However, with the help of other optimized iterations of the BSV protocol like Teranode, BSV blockchain significantly increases and broadens its utility.
By being able to scale to meet market demands for data storage, as well as transaction processing, the BSV Blockchain can be extremely useful not only for streaming services, but also for many other different industries such as accounting, banking and finance, construction, healthcare, retail and supply chain management.
A blockchain that is unable to scale is definitely an unsustainable technology. Not only does it drive transaction fees up to the point where businesses cannot afford them, but it also causes network latency and crashes that can cause a disruption in business operations.
The maximum potential of blockchain technology can only be unleashed when it is able to efficiently and economically accommodate global enterprise data needs—and this can only be done through scaling.