In order to understand how Modular Blockchains work and solve problems, you must review the problems.
Ethereum, is a blockchain, the birthplace of Smart Contracts, and the birthplace decentralized finance. Ethereum is the home blockchain for approximately 50 billion dollars of total value locked in decentralized finance projects.
What core functions does the Ethereum blockchain do?
Transactions
Data Storage of transactions, and
Consensus or security.
What problems does Ethereum have?
Transaction speed is to slow
Transaction fees are to high.
What solutions are proposed to Ethereums problems?
Linear scaling via a fundamental change in the way the Ethereum performs one of it’s core functions Consensus.
(Proof of work to Proof of Stake.)
What are the two biggest problems with the proposed solution: Changing consensus mechanism? Speed and Security.
Speed
- Changing Consensus mechanism allows Ethereum to scale or increase it’s transaction speed in a linear fashion, but the problem is increasing at an exponential fashion.
- Linear scaling increases transaction speed by 2x, 4x, 8x, 16x and 64x.
- The problem however is increasing at a exponential rate. So it increases by a factor of 10, then 100, 1000 and 10,000.
- The improved transaction speed afforded by changing from Ethereum’s current consensus mechanism to it’s future consensus mechanism is already a failed effort because mathematically it can’t keep up with the problem.
Security:
Changing consensus mechanism from Proof of Work to Proof of Stake means the blockchain is less secure. Blockchain education teaches us that Blockchain security is directly related to the number of node operators. Blockchains which use the Proof of work consensus mechanism traditionally have the most, so they provides more security then Blockchains using the Proof of Stake consensus method.
But modular Blockchains solve the linear versus exponential transaction speed problem and the security problem.
- Modular block chains allow exponential growth in transaction speed, 10, 100, 1000.
- Modular Blockchains allow Ethereum to keep it’s current method of Consensus, thus it’s current method of insuring security.
- That’s it, problems solved.
- All can be good in the Crypto Universe.
How?
- Modular Blockchains, allow you to perform the three essential blockchain functions on different Blockchains.
- So a newer, faster blockchain with speed much faster then Ethereum could perform the transactions, while data storage and consensus, otherwise known as security, could be done on Ethereum.
- Because transactions could be done on more then one additional blockchain, the scaling for more transaction capacity is no longer linear, it’s exponential.
What does this really mean?
It means transaction speed would no longer be limited by the ability to improve it in a linear fashion: 2, 4, 8, 16,… 64.
It means transaction speed could increase in a exponential fashion, 10, 100, 1000
It means the solution can increase at the same speed, or potentially greater, then the problem.
It means that security problems created by changing the consensus mechanism don’t occur, because you don’t change the consensus mechanism.
It means that slow transaction times and high transaction fees on Ethereum could become a problem of the past.
Last Words
I think Modular Blockchains are an exciting solution, to a seemingly insurmountable problem. The math doesn’t lie.
I think that’s an amazing concept.
What do you think?
The end..for now.
