Editorial Staff, 26 March 2021
Blockchain Chronicle. Transaction speed, defense against irrational behavior. How to meet the growing needs?
There are many topics dealing with crypto-currencies in this phase of growth and attraction for financial assets built with Blockchain technologies. However, one topic is taking a prominent place in these development prospects: digital trust.
The issues surrounding the notion of digital trust have ramifications across the entire Industry 4.0 value chain. Blockchain technology and its impacts on various industries are at the center of interest. Blockchain is becoming increasingly important in financial services, both in terms of value exchange between entities and data validation.
Like finance, the fields of health, insurance, energy, telecommunications or manufacturing are increasingly interacting with Blockchain technology. Security and scalability issues are therefore paramount.
The challenge lies in finding the best balance between low latency
between low latency and high security.
Unlike the Internet, which was built on Hypertext Transfer Protocol (HTTP) communication technology, blockchain technologies are numerous and built on sometimes very different technologies. Bitcoin has its own protocol. So does Ethereum. Each blockchain technology develops its own solutions to guarantee security and scalability. The race for the most advanced solution is intense, and the blockchains that best meet specific challenges are being scrutinized.
A well-known issue in the blockchain field, for example, is the latency of a technology. Latency is the time it takes for a blockchain system to process a request. The lower the latency, the better the performance. The subject of latency is eminently linked to that of security. The longer you take to validate an information, the more certainty you will have. The challenge lies in finding the best balance between low latency and high security. Current technologies provide various solutions to solve this objective.
Let’s take the example of Visa, which allows up to 25,000 transactions per second (TPS) . Bitcoin in comparison lags far behind with only 7 transactions per second in 2018. The challenger Ethereum is not really doing any better with 20 transactions per second. Ripple, a less publicized technology but well known to cryptocurrency aficionados, was built primarily to address this transaction count issue. With 1,500 transactions per second, Ripple does better than its competitors, but is still far behind Visa. The advantages of the security of the Blockchain have their disadvantages. The race to improve technologies is intense between the different players.
Private blockchains provide very efficient solutions,
with algorithms that are resistant to so-called Byzantine failures.
Another more complex example is the resistance to Byzantine failures.
This term refers to the ability of a technology to defend itself from non-rational behavior. In a system such as public Blockchains, where the consensus of information validation is central, the ability to protect against malicious validators is paramount. Private blockchains provide very effective solutions here, with algorithms that are resistant to these so-called Byzantine failures.
We understand the importance of advancing the state of the art of cybersecurity by systematically evaluating the various technologies, both in terms of their security and their ability to respond to these issues of scalability and growth. All this while analyzing and evaluating the environmental impact of the solutions used.
Switzerland, a pioneer in blockchain technology, has understood the value of such an evaluation system. Teams from the Ecole Polytechnique Fédérale de Lausanne (EPFL) led by Professor Rachid Guerraoui, in collaboration with the Wecan Group, are developing a methodology to assess the vulnerability, performance and impact of the many current and future blockchain technologies.
In view of the few pioneering solutions, the growing interest of public and private players, and the ever-increasing variety of sectors affected by these innovations, the question of choosing the best solutions is obviously pivotal.