What does on-chain scaling mean (Is a scaling agent toxic)?
What does on-chain scaling mean? The scalability, security, and decentralization
What does on-chain scaling mean? The scalability, security, and decentralization of blockchain have greatly improved in recent years, but there are still some problems.
We know that Ethereum has undergone a transition from PoW to PoS. This has led to issues such as transaction delays, increased fees, and decreased user experience. However, as the prices of cryptocurrencies like Bitcoin continue to rise, network congestion is gradually decreasing, and this phenomenon is expanding. On October 13, 2020, it was reported that Ethereum has started implementing Layer2 solutions to support smart contract creation. Although these solutions are currently attempting to upgrade Layer1, they have not achieved large-scale on-chain applications due to the low efficiency of data processing in the current state.
On-chain scaling refers to the way of accepting and executing a transaction by bundling transactions from a block into one transaction or involving a separate node (such as a validator) in the operation of the transaction. Simply put, each block is a word, and a new string is generated every ten minutes, making it a word. If someone wants to replace Bitcoin with “chain,” they can choose to run a Bitcoin node on another chain.
Usually, when there is a failure in the Bitcoin network, there will be “on-chain freezing,” which means that the Bitcoin network will not be in a working state until miners reactivate their systems, causing “off-chain freezing.” However, on-chain freezing is actually a very simple process because external chains cannot confirm or change whether the data input is correct and valid. Therefore, even in the event of a security incident, attackers can directly send a large amount of funds to another account with their own incorrect information and pay fines to protect themselves from attacks of more than 51%.
Is a scaling agent toxic?
Editor’s note: This article is from Blockchain in Plain Language (ID: hellobtc), author: Wu Huoqiu, authorized reprint by Odaily Star Daily.
Hello everyone! I am Sanqi, and today I will talk about the topic of scaling agents. It is a “stablecoin” that is also known as “digital gold” in the cryptocurrency world. But what exactly is this problem? First, let’s introduce what a scaling agent is. The so-called issuance mechanism is actually transferring mainstream assets such as Bitcoin to the Ethereum network. For example, ERC-20 tokens issued on Ethereum are traded against BTC and ETH, and these tokens are exchanged in a decentralized manner, forming a new digital economy, thereby solving the current problems of high transaction fees and slow transaction confirmations of Bitcoin to some extent. “Lightning” refers to the protocol that uses lightning technology to achieve seamless transfer and payment between smart contracts. “Plasma” is used to build scalable and secure applications, which can support the development and deployment of various DeFi applications. However, in reality, Lightning is not one of the simplest scaling methods. The reason why Lightning can achieve such high throughput and security is because its appearance is to allow users to send transactions faster. Therefore, people think that the emergence of Lightning is because it has greater network effects and lower usage costs. However, is Lightning really such an effective diffusion method? The answer is simple – the rise of Lightning is only temporary because over time, the price of Bitcoin becomes more expensive. Although it seems not so strange on the surface: “If someone wants to use Bitcoin for scaling, you must first convert Bitcoin to Ethereum.” Of course, Lightning can also be a value store, but in real life, there is not as much space as imagined, so when Lightning occurs, the price of Bitcoin will also fluctuate accordingly. In addition, Lightning can also serve as “Ethereum Boosted Energy Supply.” However, some people believe that the role of Lightning is not significant enough. What can Lightning do? In order to prevent the value skyrocketing or plummeting caused by Lightning, Lightning usually generates a set of data within a specific block and broadcasts it to other nodes. This will congest the entire system, reducing network processing capabilities and even causing some nodes to be unable to process them. At the same time, because each participant wants to share their states and they can perform the same functions between different clients, such as sharding, it makes each transaction more convenient and efficient. For ordinary investors, even if they do not have enough money to purchase Lightning products or buy them directly, there is no problem that requires spending any funds. Furthermore, Lightning can not only help alleviate small transactions but also reduce costs. In comparison, Lightning allows users to choose their own private keys to use, rather than simply holding them. The principle of lightning is to create a complete block header on the blockchain, and then set the corresponding data set and address according to a certain function, thereby improving the speed and reliability of transactions. In actual scenarios, Lightning can be used to protect user privacy.
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