In 2017, the cryptocurrency market experienced rapid growth, and blockchain technology became a major topic of discussion. One of the key challenges facing blockchain trading platforms today is scalability. A Singapore-based tech company named Zilliqa has developed sharding technology, aiming to address this issue and potentially outperform traditional payment providers like Visa.
According to reports, Bitcoin and Ethereum can handle no more than seven transactions per second, while Visa processes around 8,000 transactions every second. This makes it difficult for blockchain systems to compete with established payment networks. What's worse is that older blockchains like Bitcoin and Ethereum struggle to scale as they grow. As more users enter the crypto space, competition for transaction slots intensifies, leading to higher fees and inefficiencies.
Zilliqa, led by CEO Dong Xinshu, is working to change this trend. The team consists of researchers from the National University of Singapore and has been developing innovative ideas since 2015. Their goal is to create a blockchain that can scale efficiently without additional costs. Unlike traditional blockchains, where all miners compete to solve the same problem, Zilliqa’s approach divides the work into smaller parts, allowing for greater efficiency.
In traditional blockchains, miners race to solve complex math problems, with only one miner winning the reward. This creates a lot of wasted computational power, as 99% of the effort goes to those who don't succeed. Zilliqa’s sharding model changes this by splitting the network into multiple shards, each handling a portion of the workload. For example, instead of 8,000 miners solving the same problem, they are divided into 10 groups of 800, each tackling different tasks. This shift turns competition into collaboration, improving energy efficiency.
As the network grows, so does its capacity. More shards can be created, allowing more miners to process transactions simultaneously. This leads to increased throughput without raising the difficulty level. Additionally, more transactions can be processed under the same power consumption, making the system more environmentally friendly. Transaction costs also drop significantly, while miners still earn the same rewards.
Recently, Zilliqa passed Amazon’s internal test network, achieving over 2,488 transactions per second—more than 100 times faster than Bitcoin and Ethereum. This is just the beginning. If Ethereum’s 22,000 miners were to join Zilliqa, it could support up to 15,000 transactions per second, surpassing Visa’s capacity.
However, sharding isn’t without risks. Security concerns remain, as hackers might target individual shards rather than the entire network. Despite these challenges, the potential for blockchain to become a global financial backbone is growing. With the right infrastructure, projects like Zilliqa could one day rival traditional payment giants and shape the future of finance.
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