Scalability Challenges in Web3 and How DFINITY Addresses Them

Scalability is one of the major challenges facing the Web3 ecosystem, which includes decentralized applications (dApps) built on blockchain technology

Scalability Challenges in Web3 and How DFINITY Addresses Them

Scalability is one of the major challenges facing the Web3 ecosystem, which includes decentralized applications (dApps) built on blockchain technology. The scalability problem arises from the current limitations of blockchain technology, which can only handle a limited number of transactions per second (TPS). This means that as more users and dApps join the network, the system can become congested, leading to slow transaction processing times and high fees. There are several ways that the scalability problem is being addressed in the Web3 ecosystem:

  • Layer 2 Scaling Solutions: These solutions involve adding a layer on top of the base blockchain that can handle a higher number of transactions per second. Examples of layer 2 scaling solutions include Plasma, the Lightning Network, and state channels.
  • Sharding: This is a technique that involves splitting the blockchain into multiple smaller chains, known as shards. This allows each shard to process transactions independently, increasing the overall TPS of the network.
  • Off-chain Transactions: This solution involves moving transactions off the blockchain and into a separate, off-chain environment. This can help to reduce congestion on the main blockchain and increase TPS.
  • Optimizing Consensus: Some projects are working on optimizing the consensus mechanism used in the blockchain. For example, projects like Ethereum are working on replacing their current proof-of-work consensus mechanism with a proof-of-stake mechanism, which could potentially increase scalability.
  • Hybrid Solutions: Some projects are combining different scaling solutions, such as using a combination of sharding and off-chain transactions to increase scalability.

Final Set Dfinity

The final set piece to enable developers to build out censorship-resistant Web3 experiences completely on-chain is a “world computer” — a concept that first emerged in the early Ethereum community. DFINITY Founder and Chief Scientist Dominic Williams assembled over 200 world-renowned cryptographers, distributed systems engineers, and programming language experts from Google, Amazon, Microsoft, IBM, et al. to tackle the massive challenge of building the Internet Computer, a world computer powerful enough to support infinitely scalable Web3 dapps.

But a network managed by thousands of people running millions of nodes across the globe comes with potential challenges, particularly regarding scalability — the measure of the number of updastes or transactions that a network can handle per second (TPS). Crypto dogma dedicates the more decentralized a network is, the lower its scalability and TPS. Bitcoin and Ethereum, the two most popular blockchains, have a speed of about 5 and 13 TPS respectively. When the demand for transactions exceeds their capacity, the performance of these networks suffers, creating a backlog and leading to problems like network congestion and high transaction costs (aka gas fees).

Scalability issues have long stood in the way of blockchain’s widespread adoption, preventing it from providing optimal solutions to businesses and industries worldwide, and ultimately, leaving the cypherpunk vision of a world computer just out of reach. The DFINITY Foundation recognized that a blockchain network needs to run at internet scale and web speed to take this revolutionary technology mainstream — which is why DFINITY developed novel cryptography and computer science to build and launch the Internet Computer, delivering on the vision of a decentralized world computer.

Architected scalability

The Internet Computer is the ultimate original layer-1 blockchain that developers around the world can use to build infinitely scalable dapps, DeFi, social media, enterprise systems, NFTs, and web-based services. Canister smart contracts are capable of receiving and responding to HTTP requests and processing data at the speed that users expect when using the web.

Smart contract executions are divided between update calls, which modify state, and query calls, which are read-only requests. Update calls are processed on every node in a given subnetwork, while queries are processed on one node. A recent Internet Computer performance evaluation tested all subnets concurrently except the NNS by targeting their nodes with an incrementally increasing load, demonstrating a throughput of 11,000 update calls/transactions per second over 4 minutes, with peaks of 11,500 and finality of 1 second on dapp subnets. The throughput for query calls stood at 250,000 per second, with completion within 200 milliseconds.

These numbers are particularly significant in comparison to Solana’s measurement of 1,000 TPS, which was until recently considered a benchmark in blockchain performance.

As a result, everything from DeFi systems and dapps to online games and tokenized social media running on the Internet Computer can operate at web speed and offer unprecedented scalability. It provides developers with powerful software frameworks to reimagine and rebuild the world’s systems and services on the blockchain.

Going big with subnets

The Internet Computer Protocol is running on standardized node hardware in independent data centers around the world. The Network Nervous System, the open, permissionless, on-chain governance system, scales the network by combining nodes from different data centers to spin up new subnet blockchains.

The Internet Computer’s partitioning into subnet blockchains is what allows the network to infinitely scale. Each subnet blockchain is capable of processing update and query calls independently from other subnets. This means that the entire network can easily be scaled by simply adding more subnets to the network. For update calls that need to be processed on every node, this method of scaling the network can ensure that more update calls are processed per second. The Internet Computer is capable of adding hundreds of new subnets via the NNS.

For query calls, however, scalability can simply be achieved by adding more nodes to a subnet because these calls are processed locally on one node. The network is capable of adding thousands of new nodes in its current state. The addition of more nodes and subnets to the network ensures web speed and infinite scalability.

Finality seals the deal

The Internet Computer’s novel consensus mechanism also plays a key role in the network’s ability to scale. Internet Computer Consensus (ICC) consists of four different layers that create candidate blocks, identify valid blocks, rank block makers, and then finalize the agreed upon blocks. The blockchain’s asynchronous finalization mechanism is impressively fast, ensuring that the finality for new blocks is achieved in under two seconds on average on the NNS subnet, and 1 second on dapp subnets.

This contributes to the Internet Computer’s resilience. Additionally, unlike legacy blockchains, the Internet Computer has no nodes hosted by cloud providers like AWS, Microsoft Azure, Google Cloud, and Cloudflare, helping ensure that the network is tamper-proof, secure, and stable.

The advanced scalability of the Internet Computer signals a new era in the development of decentralized apps and systems that are capable of supporting tens of millions of users, substantially reducing the costs associated with blockchain transactions and making blockchain-based services feasible for mainstream adoption.

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