These are the keys to a net­work’s expan­sion.


4 min read

Opin­ions expressed by Entre­pre­neur con­trib­u­tors are their own.


Ama­zon, Wal­mart, Face­book, IBM: These are among the house­hold names using blockchain to change busi­ness. In fact, accord­ing to a recent Deloitte sur­vey, more than half of com­pa­nies say blockchain is a crit­i­cal pri­or­i­ty for their orga­ni­za­tion. And 83 per­cent say there’s a com­pelling busi­ness case for the inno­va­tion.

Dis­trib­uted ledger tech­nol­o­gy (DLT) has arrived, but the ques­tion is whether it’s scal­able to match the marketplace’s high expec­ta­tions. Con­sumers want real-time trans­ac­tions while hav­ing assur­ance of secu­ri­ty from val­i­dat­ing nodes. Busi­ness­es also want high through­put for their glob­al oper­a­tions, with zero down­time. But it doesn’t always work that way, espe­cial­ly with new tech. There are glitch­es, bugs and design flaws. More­over, reg­u­la­tors often force orga­ni­za­tions (or net­works) to change how they oper­ate.

Here are three crit­i­cal fea­tures that a blockchain net­work must have to achieve wide adop­tion.

Relat­ed: Become a Blockchain Expert for Less Than $20

Speed

Fast speed is essen­tial to help enter­pris­es in prac­ti­cal, day-to-day use. Meta­Hash is a net­work based on blockchain 4.0 tech­nol­o­gy that’s applic­a­ble to a wide vari­ety of indus­tries. Aim­ing to sup­plant tra­di­tion­al infra­struc­ture, it’s one of the fastest such net­works in the world.

In the past, even the largest net­works ground to a halt when they saw spikes in traf­fic. Slow speed leads to frus­tra­tions and some users return­ing to tra­di­tion­al solu­tions. When there’s a ton of traf­fic, it’s not uncom­mon for Bit­coin set­tle­ments to take longer than 30 min­utes. Two years ago, the Cryp­toKit­ties game went viral and clogged the Ethereum net­work, where Meta­Hash process­es 50,000 trans­ac­tions per sec­ond and val­i­dates set­tle­ments in three sec­onds or less. 

Sustainability

To an extent, blockchain is already see­ing large-scale adop­tion from glob­al enter­pris­es. Wal­mart uses it to track food from farm-to-plate to ensure safe prod­ucts. Face­book is rolling out Libra, a dig­i­tal token, and phar­ma­ceu­ti­cal giant Mer­ck is cre­at­ing a pilot pro­gram to fight coun­ter­feit drugs. But at this stage, those DLT ini­tia­tives are still new and exper­i­men­tal.

What hap­pens when immutably stored data accu­mu­lates to huge files? Can a net­work sus­tain its per­for­mance when a ton of view­ers (busi­ness part­ners, reg­u­la­tors and oth­er stake­hold­ers) join? In the future, experts think some DLT sys­tems will see per­for­mance issues from what’s called “blockchain bloat.” It occurs when tril­lions (or more) of blocks are per­ma­nent­ly stored on-chain, caus­ing wal­lets to take weeks to down­load and caus­ing a sys­tem to become less reli­able.

Shard­ing is a pro­posed solu­tion, but many sys­tems, includ­ing Ethereum, have been unsuc­cess­ful at imple­ment­ing it. It par­ti­tions data­bas­es so that indi­vid­ual “shards” store dif­fer­ent chunks of data. As blockchain matures, shard­ing will become more crit­i­cal as the amount of per­ma­nent­ly stored data increas­es to gar­gan­tu­an sizes.

Com­bin­ing DLT with oth­er inno­va­tions, such as arti­fi­cial intel­li­gence (AI), will also help to bring main­stream adop­tion. AI-assist­ed tech is being embed­ded in mobile, smart home devices, vehi­cles and wear­ables, and blockchain can be used to store all the cap­tured data. One exam­ple is Deep­Cloud AI, which is using both blockchain and AI to decen­tral­ize cloud com­put­ing (DCC). The DCC plat­form enables busi­ness­es and indi­vid­u­als to mon­e­tize idle stor­age and com­put­ing capac­i­ty. AI can match near­by com­put­ing resources with real-time cus­tomer demand. This approach improves speed, reduces cost and pre­vents clogged net­works.

Relat­ed: 6 Ways Cryp­tocur­ren­cy and Blockchain Are Chang­ing Entre­pre­neur­ship

Privacy

Last but not least is pri­va­cy. Data secu­ri­ty has received nation­al atten­tion due to breach­es at Equifax, Yahoo! and Mar­riott, as well as con­gres­sion­al hear­ings on Face­book and Google sell­ing per­son­al data of mil­lions of users. Blockchain’s sell­ing points include pri­va­cy, data secu­ri­ty and an anonymi­ty net­work. This is all fair­ly com­pelling giv­en strong user pref­er­ence for pri­va­cy, as well as gov­ern­men­tal inabil­i­ty to hold big tech account­able for sell­ing everyone’s data.

To gain main­stream adop­tion, net­works must fea­ture sig­nif­i­cant­ly favor­able eco­nom­ics. Finan­cial insti­tu­tions have invest­ed a for­tune in their infra­struc­ture. Blockchains can make a com­pelling case that makes con­sumers want to switch by mak­ing trans­ac­tions extreme­ly inex­pen­sive and fast in com­par­i­son. Cost effi­cien­cy, data secu­ri­ty, smart con­tracts, fric­tion­less cross bor­der set­tle­ments — these are very real advan­tages. Due to grow­ing adop­tion and scale of use, blockchain ven­tures must solve scal­a­bil­i­ty issues to even­tu­al­ly achieve main­stream adop­tion.

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