Top 5 Scaling Solutions That Can Change Bitcoin and Ethereum Forever

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As a seasoned crypto investor with years of experience in the market, I strongly agree with Justin Bons’ perspective on the importance of scaling solutions for Bitcoin (BTC) and Ethereum (ETH). The refusal of these two leading cryptocurrencies to adopt groundbreaking scaling technologies is concerning, especially given the potential they hold.

Justin Bons, the founder and Chief Investment Officer of Cyber Capital, has offered his perspectives on potential strategies for expanding the markets of Bitcoin (BTC) and Ethereum (ETH) individually.

I’ve analyzed a recent post, and it opened with a focus on Bitcoin and Ethereum’s reluctance to implement some revolutionary scaling solutions despite their groundbreaking nature. Among these potential solutions are parallelization, sharding, Directed Acyclic Graphs (DAGs), zero-knowledge (ZK), and modular scaling. In my perspective, I firmly believe that these innovations represent the future of digital assets.

BTC & ETH could adopt the best scaling technologies, but that is not happening
Instead, they deny the tech even though it is groundbreaking!
From parallelization, sharding, DAG, ZK & modular scaling!
As these five scaling methods are inevitable the future of cryptocurrency: …
— Justin Bons (@Justin_Bons) June 13, 2024

Parallelization

As a researcher studying computing technologies, I can tell you that this innovation enables each and every computer core or thread to operate simultaneously. Consequently, instead of letting unused processing power go to waste, we effectively harness it to boost overall system performance.

Modern computers are equipped with multiple cores, which allows for parallel processing. Parallelization takes advantage of this multicore architecture to execute multiple tasks simultaneously. Nevertheless, Bitcoin and Ethereum currently operate on a single thread, without any imminent plans for change. The founder of Cyber Capital strongly recommends that all blockchain platforms adopt this approach, considering the insignificant trade-offs involved.

Several protocols, including Solana, Aptos, SUI, and SEI, make use of the existing parallelization scaling solution.

Sharding

Sharding is a data partitioning technique that breaks down large databases into smaller, quicker, more manageable segments. According to Bons, sharding builds upon the principle of concurrency by distributing workloads not only across different cores on a single computer but also among multiple separate machines or entities. In his view, this represents real scaling.

Instead of a purely parallelized chain, using cross-shard messaging involves a trade-off: while it enables communication and coordination between different shards, it comes with a slight decrease in overall speed due to the additional time required for messages to be confirmed between shards.

Direct Acyclic Graph (DAG)

Sharding employs numerous interconnected chains, whereas DAGs (Directed Acyclic Graphs) feature a tree-like structure with multiple branches. The allure of DAGs lies in their supposed “limitless” scalability and quickness. However, like other structures, DAGs come with their own set of trade-offs, including the inability to monitor a single, composable state.

As a thorough analyst, I’ve come across several noteworthy projects that have effectively implemented the same innovative solution. Among these are Avalanche’s X-chain, Fantom (FTM), Kaspa (KAS), and NANO.

Zero Knowledge (ZK)

Using advanced cryptography, this method enhances efficiency by limiting the addition of proofs instead of the entire data into the blockchain. Bonas believes this innovation holds significant promise for transforming the blockchain scaling landscape, addressing the long-standing challenge of achieving scalability, security, and decentralization simultaneously – a feat yet to be achieved by most Layer-1 platforms such as Bitcoin.

Experts are continuing their efforts to completely integrate a native Ethereum ZK-EVM (Zero-Knowledge Ethereum Virtual Machine). Several Ethereum Layer 2 scaling projects have successfully implemented this technology. Among these, Polygon‘s zkEVM is particularly noteworthy.

Modular

Heterogeneous sharding refers to the practice of distributing workloads across multiple chains, allowing each chain to set its own rules in modular scaling. Justin Bons pointed out that Ethereum Layer-2 solutions don’t fully fit this description since they lack a shared interoperability protocol, resulting in a notable difference between them and heterogeneous sharding systems.

With confidence, Bon believes that the proposed scaling solutions, once put into practice, will bring about substantial improvements for both Bitcoin and Ethereum.

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2024-06-14 00:22