Connect with us

Featured news

Can Sharding Fix the Limitations of Blockchain or is the Network Doomed?

Published

on

READ LATER - DOWNLOAD THIS POST AS PDF

Performance and scalability issues have bottlenecked the future development and real-life application of popular mainchains, such as Bitcoin and Ethereum. Many methods have been employed to solve this problem, but all of them have their own pros and cons.

The Impossible Trinity – safety, decentralization and scalability, coined by the blockchain world, bars the way to the future and the industry has fought hard to figure out an optimized solution. Sharding, proposed by Ethereum, has been viewed as one such candidate.

What is sharding?

Sharding technology splits a network into smaller partitions called shards, which contain an independent state and transaction history. The idea behind this is to divide a huge amount of workload into smaller pieces to make life easier for every participating node.

If sharding were to be adopted, each node will only need to keep a part of the network’s information, instead of downloading the whole ledger, which can lead to a large data file. Subsets of nodes grouped into one shard will only process transactions specific to that shard. By doing this, the network will be able to process many transactions in parallel, and the performance will continue to increase with more nodes joining in, thus making the network highly scalable.

Limitation of sharding

Of course, sharding carries both pros and cons. The security of the network might be compromised as sharding makes it possible to launch Single-Shard Takeover Attack (1% Attack), where an attacker can create a malicious shard by taking over the majority of collators in a single shard. A 1% Attack is easier to be launched compared to the 51% Attack, which requires more than 50% of the network’s computing power.

To solve this problem, one suggestion is that every shard gets assigned a validator that is random-sampled from a pool. This way, the validator does not know which shard it gets beforehand, so chances it will collude with a malicious node are minimized.

However, this untested solution raises questions. Who would be a qualified validator? How to incentivise validators? What if a validator fails and a malicious node gets validated? What if there are too many malicious nodes causing the random-sample approach to be de facto ineffective? All this needs to be carefully addressed.

Apart from the above, sharding also brings forth other problems. First, by partitioning the whole network into smaller shards, it is effectively making the whole network more susceptible to attacks as it is always easier to take control of a part of the network than the whole network.

Next, with a validator assigned to each node, the problem of single-point-of-failure appears again, and this could cause the network to be less decentralized. A more complex mechanism will, however, eat into efficiency and defeat the initial purpose.

Last but not least, while a validator might be able to protect the network from being jeopardized by a single malicious node, all the data in that attacked node are left unprotected.

So it seems that while sharding is improving performance, it is also sacrificing safety and degree of decentralization, which is surely not an ideal solution.

What can be done?

Blockchain Directed Acyclic Graph (B-DAG) is a proprietary solution by the SmartX project. Unlike a blockchain, every single transaction is itself a “block” in a B-DAG system. From this perspective, B-DAG resembles DAG. However, unlike other DAG projects, SmartX has different Epochs, which subdivide the network by a given time-cycle and main blocks are randomly produced in each Epoch. The main blocks will be linearly linked to form the Most Heavily Weighted Chain, which resembles the chain-structure of blockchain.

With this unique B-DAG technology, SmartX is harvesting both the advantages of traditional blockchain and DAG. It is faster, cheaper-to-use and more scalable compared with the traditional blockchain, while it is also safer and more promising compared to DAG.

Like traditional trading systems, SmartX uses a balance account model. During every Epoch cycle, if it is found that an output account for a certain transaction block does not exist, the account will be created across the network. The input amount will be transferred to this account and the input must have sufficient balance. Each account balance is determined by the difference between the input and output transaction components. 

The system ensures that every transaction is treated as idempotent. The end result is the same whether a transaction is executed once, multiple times, or repeated. Duplicated transactions are recognized by the random Nonce value of the transaction. 

SmartX will have several genesis nodes by default, each staking a minimum of 10 million tokens in order to allow participation in node operation. SmartX allows for mining nodes to join and leave at any time. The purpose of this is to select nodes that have a stronger willingness to participate. 

Conclusion

Sharding is only a band-aid solution to the fundamentally broken system of Blockchain. Sharding breaks the network down into partitions to deal with workloads but compromises decentralization and security. Blockchain needs to be completely reimagined, not fixed after the fact. The project SmartX does just this through its own proprietary, innovative and all-new DAG structural algorithm – B-DAG, which can integrate the transaction partitions created by any nodes around the world. Since SmartX operates like a flow chart and every transaction does not need to pass through nodes sequentially, the project does not have the same memory issues as Blockchain. This feature also gives SmartX a higher transaction speed and allows implementation of more than one consensus mechanism. 

Sharding will always have to operate on a Proof of Work system and hold all transactions as “pending” before packaging them at the same time. SmartX is using both Proof of Work and Proof of Stake. By doing this, SmartX is able to take advantage of both types of consensus mechanisms. Every node participating in SmartX’s network will have to make a pledge and ensure that it has enough bandwidth and capacity to support itself. SmartX will use proprietary Blockchain-DAG technology to achieve decentralization, optimized handling capacity and delay validation at the same time.

SmartX Links

Telegram Channel: https://t.me/smartx_en

Website: http://smartx.one 

Twitter: https://twitter.com/SmartXOne 

Reddit: https://www.reddit.com/r/Smartxone/

BitcoinTalk:https://bitcointalk.org/index.php?topic=5164757.msg51805131

Featured news

Bitcoin Investors – Keep Your Eyes on Inheritance Tax

Published

on

crypto tax
READ LATER - DOWNLOAD THIS POST AS PDF

The IRS recently warned crypto investors to pay their bitcoin taxes or amend returns that have been misreported. By sending out warning letters, the IRS essentially put the magnifying glass on all crypto investors. 

This magnifying glass is about to get even bigger following a recent court order delivered on August 26 by a Florida court. If you are a crypto enthusiast, then you have likely heard of Craig Wright, an Australian computer scientist who has attracted criticism over his claim that he is the mysterious bitcoin inventor, Satoshi Nakamoto.

Craig “Satoshi” Wright was sued by the estate of his former business partner, the late Dave Kleiman. Kleiman is a bitcoin pioneer who died in 2013. Before his death, Dave and Wright had allegedly mined over a million bitcoins together.

Craig Wright to hand over 500,000 BTC worth over $5 billion

In the August 26 order, Judge Bruce Reinhart of the Southern District Court of Florida said that Wright should hand over half of the bitcoin (BTC) that he and Dave had mined before the latter’s death.

That’s 50% of the 1.1 million bitcoins Craig Wright and Dave Kleiman allegedly mined together going to the plaintiff – Dave’s brother, Ira Kleiman. Ira…

Continue Reading

Featured news

How Will Mozilla’s Firefox Private Network Affect the VPN Market?

Published

on

VPN
READ LATER - DOWNLOAD THIS POST AS PDF

Mozilla announced earlier this month that its web browser, Firefox will block third-party trackers for everyone by default. And last week, the company announced another interesting product that could revolutionize the browser market.

The new product dubbed Firefox Private Network will act like a virtual private network (VPN) although the company thinks what it is building is something different from the conventional VPN. The new product is expected to give Firefox users more privacy online by providing an encrypted path to the web.

One major difference between the Firefox Private Network and the traditional VPN is that Mozilla’s product is web-based, which means you can only access its services when browsing the internet using the Firefox browser.

This presents an interesting challenge to other developers of web platforms including Google Chrome, Microsft Edge, and Apple’s Safari, among others. It also poses a potential threat to VPN service providers since this could be a substitute product to the already existing services.

The company recommends its new product to those using public Wi-Fi or those that want to hide from ad trackers. Nonetheless, this is not a comprehensive VPN service and will be a huge let-off for VPN providers.

In addition, while the service is available originally free on beta, Mozilla said that this is only for a limited time. So, clearly, a premium service will eventually replace the free pilot…

Continue Reading

Featured news

eToroX Review: A Top Cryptocurrency Exchange

Published

on

READ LATER - DOWNLOAD THIS POST AS PDF

eToroX Review

eToroX is a digital assets exchange which features a cryptocurrency trading exchange as well as a crypto wallet. eToroX is created by the same group that operates the eToro forex and CFD social trading platform, but this Exchange is for trading, buying, selling and exchange of cryptocurrencies and blockchain-based/tokenized assets.

Regulation and Ownership

The crypto wallet and exchange services offered by eToroX (a company incorporated in Gibraltar and owned and operated by the eToro Group) are regulated by the Gibraltar Financial Services Commission. eToro X is a regulated DLT provider with licence number FSC1333B.

Fees

Two types of fees are incurred by eToroX users: exchange fees and wallet fees. Exchange fees relate to deposit/withdrawal transactions and charges on trading activity. eToroX does not charge for deposits. Trading fees are either maker (limit orders) or taker fees (market orders). Maker/taker fees are tiered and are adjusted by trading volume.

Monthly Volume

Maker fees

Taker fees

Tier-1
<$100,000

0.10%

0.24%

Tier-2
<$500,000

0.09%

0.22%

Tier-3
<$1,000,000

Continue Reading

Elite