Tackling The Hurdles In Blockchain

Tackling The Hurdles In Blockchain

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Blockchain can be defined as a public ledger of all cryptocurrencies and is a digitized and decentralized system. It was originally developed by Bitcoin as its accounting method. Blockchain uses the distributed ledger technology (DLT) and is finding a large number of commercial applications today. A block is said to be the current part of a blockchain that records some or all of the recent transactions. A blockchain consists of a large number of such blocks. A new block is generated as soon as a block is completed. These blocks are linked in chronological order and are added through cryptography. The blockchain transactions are, hence, immutable and unchangeable.

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Problems with the current Blockchain
When the internet first came into existence, it was slow and expensive. However, over the time with the development of new technology, it became faster and cheaper. Similarly, the blockchain transactions are facing a few problems that are limiting its usability. However, a lot of research is underway to solve the problems which are discussed below:

  • High Transaction Cost

Transaction fees in blockchain arise from the process of blockchain ecosystem offering computer processing power to service the network, which is compensated in cryptocurrency in exchange for their service.
Though the transaction costs in blockchain are lower than the traditional banking system, they can still be a huge amount depending on the urgency of the transaction and the type of it. For instance, the current Ethereum fees per transactions lie between USD 2 and USD 3 while that of Bitcoin is between USD 20 and USD 30.

  • Cross-Chain Transfers

A cross-chain transfer or an atomic swap in the current scenario is quite a tedious process. Two blockchains can communicate in a very limited manner because they have different protocols. If a person having crypto assets in Bitcoin wants to transfer them to a person on the Ethereum blockchain, they will first need to convert Bitcoin crypto assets into Ethereum crypto assets. Then, Ethereum crypto assets will have to be transferred to a wallet that supports it and after that, the transfer will be successful.

  • Low Speed

Most of the blockchain protocols are of limited size, and a specific amount of time is taken to generate a block. A Bitcoin blockchain takes about 10 minutes to receive network confirmation while Ethereum takes 10 to 19 seconds. This places a cap on the number of transactions that can be processed by a blockchain in a second.
However, the traditional centralized systems are extremely faster as compared to these. For instance, Paypal can manage nearly 193 transactions per second while Visa can manage up to 56,000 transactions per second.

  • The Problem of Scalability

All the blockchain protocols have the problem of scalability. Since each node or the computer on the blockchain needs to process every transaction, they need to maintain a copy of the entire ledger. In the traditional database system, the problem of scalability can be easily solved by adding more number of physical server computers. However, adding more physical components at every node of blockchain is impractical.

What is the Solution?
The problems outlined above are limiting the usability of the blockchain. The QuickX protocol aims at solving these problems by the development of a decentralized platform. The off-chain transactions under QuickX protocol provide a solution to the problems of scalability, time, and cost.

QuickX Protocol
QuickX makes the cryptocurrencies suitable for mass adoption by solving the current limitations of time, cost, scalability, and cross-chain transfers. It offers instant transfer of different cryptocurrencies between two parties through off-chain transactions instead of on-chain transactions. This happens through the use of cryptocurrency pool facilitators, which also brings down the transaction fees. Here’s how it is done.

How it works
In the on-chain transaction, if a user wants to do the atomic swap, they will first need to add an offer which is taken by the smart contract into escrow. The second part picks the offer from there and later, maker sends the tokens which are received by the taker. However, the solution offered by QuickX protocol in the form of off-chain transaction will have the following advantages:

  • It will allow thousands of transactions without any need for the confirmation.
  • It will have very low commissions and will allow micro-payments.
  • The payments will be instantaneous as the users will not have to wait for the miners to confirm the transaction.
  • It will allow instantaneous atomic swaps between the cryptocurrencies.

The low cost of the off-chain transactions offered by QuickX is because of the fact that it creates external channels for atomic swapping of the cryptocurrencies. It happens as follows:

  • Both users will insert an amount into ‘common fund’ to open a channel that is managed off-chain. Everything happens through this channel and therefore, it isn’t required to be written in the blocks because it will not appear on the blockchain. Also, it doesn’t require miner’s confirmation and users will not be required to pay node-based transaction fees.
  • Now, these users use the common pooling channel to send cryptocurrencies to each other.

The transactions here are almost instantaneous akin to the traditional payment system. It solves the cost and scalability issues.

Cryptocurrency Pool Facilitators and Transaction Facilitators
The interoperability of QuickX is majorly supported by what is known as cryptocurrency pool facilitator. They provide the much-needed liquidity into the blockchain ecosystem and facilitate the cross-chain transfers. The QuickX pooling facilitator is open to anyone who has a good liquidity reserve. It can make transactions for the users and also ask for a loan from any other pooling facilitator.An off-chain order book is maintained by the transaction facilitators and the cost of it is almost negligible. The on-chain settlement of a transaction takes place only once the off-chain transaction is complete.

The Bottom Line
QuickX allows faster execution of otherwise slow blockchain transactions through a better interface. It allows lending between the pooling facilitators and is, therefore, an efficient protocol. It also provides the system components like debit cards to access the funds directly from the wallet. It is a highly secure platform with almost negligible transaction costs and has the capacity to expand globally without having to be present physically.

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