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Understanding scalability in just 3 minutes

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In the digital age, the speed of data transmission, instant execution of transactions, cost and related technologies are all elements to consider when launching a project, especially in the cryptocurrency ecosystem. This is where the question of the scalability of a blockchain comes in.

But what exactly are we talking about? What does scalability really mean in the cryptocurrency ecosystem? How important is it? We explain it to you in less than 3 minutes.

What is scalability in practice?

The term “scalability” can be simply translated as “scalability” in French. More specifically, this notion refers to the development capacity that a blockchain can cope with.. It is therefore about the “scalability” of the latter. We could eventually speak of “scaling up” or “scaling down.”. So that you understand that it is about questioning the ability of a blockchain to host and process more data and transactions in a very short period of time (seconds) without failure or reduced network performance.

Older blockchains seem to be very limited in terms of transactions per second. An example is Bitcoin, which is limited to 7 transactions per second. The same is true for Ethereum, which has long been limited to 15 transactions per second. To improve this flow and the increasing demand, updates are made to these blockchains.

From the note Some new blockchains will try to differentiate themselves from the competition by offering very high scalability.

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How does it work?

Specifically, each blockchain has its own technical limit, especially in terms of transactions per second. Very often, when a new blockchain is launched, it is limited or restricted to meet the necessary demand. It may be slightly higher to absorb the additional demand stream that could quickly emerge if the blockchain is successful.

See also. Understanding tokenization in just 3 minutes.

Why is the question of scalability so important?

Behind this question of the scalability of a blockchain lies the problem of network congestion. Indeed, in this case, users face several difficulties:

  • The time to process the data will increase Due to the blockchain cap involved.
  • The cost of performing a transaction will increase mechanically. Therefore, small transactions will be disincentivized in favor of large ones to reduce these costs.

The direct consequence of these two difficulties is that a congested blockchain will tend to drive users away. Users will not hesitate to find a viable alternative in another cryptocurrency project to execute transactions at lower cost.

Conclusion : The problem with the rise of blockchain.

For any cryptographic project, it is essential to have a blockchain that can be extended. The issue of scalability of a blockchain is a real problem for these systems that aim to be decentralized.

However, the cryptocurrency ecosystem is still young and new. It is a universe that is still searching for itself and lacks maturity. The resolution of the scalability problem may come, in the near future, from an optimization and improvement of existing crypto projects. But it is also possible to foresee that only the appearance of new, technologically more successful projects will solve this scalability problem.

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