Blockchain technology presented the world with limitless opportunities in different spheres of the world’s economy since its inception, these innovations have been quite evident in the crypto-space, given its affiliation to the financial sector. This development has been a welcome one as it has dramatically improved the nature of transactions around the world, and even though it is still in its infant stage it has begun to gain widespread recognition due to its features which includes: speed of transactions, removal of a centralized third party, near-zero transaction fees, ease of intercountry transactions amongst others.
However, as this technology continues to take gradual steps towards mass adoption every day, there has been an ever-increasing yearn for scalability, which would play a significant role in driving mass adoption. This would be of great necessity to the space as there is a need not just to rival the existing traditional scale of transaction but to surpass it. Bitcoin currently processes 7 transactions per second which are a far cry from over 20,000 transactions per second which Visa processes, Ethereum made an effort to provide some improvement to this and was able to achieve 15 transactions per second; we also see Ripple being able to give a maximum of 1,500 transactions per. With all of this top cap cryptocurrencies being unable to successfully compete with existing payment platform in terms of scalability, there has been a need to deliver more and in a fast-evolving world of ours today we that these possibilities are not just possible, they are already here.
POW Vs. ETH 2.0 POS consensus algorithm
So far, there is a significant difference between ETH 1.0 and ETH 2.0 in terms of block creation by participants, in the later miners proof that work is being put in to ensure the successful process of mining. This proof-of-work(POW) consensus algorithm is achieved by making use of computational resources to make calculations in the process of mining, in doing so, they make modifications on the blocks until the hash of the block comes out as a particular number.
As has always been the case since the use of POW, and major downside to this consensus algorithm is the consumption of enormous computational and electrical resources which inevitably leads to higher cost of starting and running for individual nodes on the network, special chips have been developed to aid this complex process of mining which leads sidelining of an average layman in participating in this network.
ETH 2.0 proof-of-stake (POS) on the other hand, harnesses the use of a better way of achieving the process of a fast transaction confirmation without compromising security. This is achieved through a combination of random selection and wealth or age (i.e. stake) of the creator of the next block. Although this system has been seen to carry its downsides, these have been improved upon in the ETH 2.0 system.
How the perceived vulnerability has been tackled
While in the POW consensus algorithm, it is no doubt that the commitment of computational and electrical resources plays a significant role in ensuring the security of the network- because it puts in check the possible hijacking if the system- this security can also be achieved in the POS system.
The chain-based proof-of-stake, which is what Phore upgraded from, had two significant challenges. In the POS miners have to commit a lot of resources to earn the right to create new blocks and confirm transactions on a branch of the blockchain, which reduces the chances of monopoly of the network, while in the chain based POS system miners do not have that worry about mining on multiple branches of the blockchain. Secondly, chain-based proof-of-stake is at the risk of being manipulated so that the user stands a higher chance of proposing the next block; this vulnerability was temporarily addressed by PIVX, however the need to infuse absolute randomness into the system to avoid any form of manipulation is of utmost importance.
The RANDAO and the CASPER systems have both been designed and implemented into the ETH 2.0 to adequately cater to this vulnerability. The RENDAO system implemented by ETH 2.0 has been designed to allow a group to pick a random number in a way that is almost entirely trustless, this random number is now used to select the next group of blocks generators. CASPER, on the other hand, provides finality to transactions ensuring that after a particular duration(usually one hour), there can certainly be no alterations on the block; it also prevents users from voting for more than one branch of the blockchain.
The dilemma before Sharding
Before now the Bitcoin network has always been faced with the challenge of having every mode process every transaction which leads to the high possibility of delayed transactions and ultimately an increase in miners fee (transaction fee) for transactions to get confirmations, a system that would achieve an even better level of security this system provides a much faster transaction speed is where the dilemma lies.
How Phore Maximises this solution
Although Phore is based on ETH 2.0, it has successfully built its code from scratch with modifications to its implementation (like the API for shards); the Phore team is always contributing and working with the Ethereum Dev team to build common components.
One of the goals here is really to have a complete cryptocurrency ecosystem that would have the capacity to handle not only full Turing-complete smart contracts but also optimized shard blockchains for specific use cases. Any other type of blockchain that is optimized for a particular purpose can be added as a Synapse shard type.
There can be a fast, secure transfer blockchain, a full Turing-complete smart contract blockchain, identity blockchain, a privacy blockchain, a decentralized storage blockchain, and a cross-chain DEX, etc. And all of these will coexist and interact with each other securely, and each type can be scaled up independently as needed to handle more transaction volume.
They will all benefit from the security and speed of the underlying architecture, and each one is also running independently of the others and can have their own consensus rules. The system will be able to implement the ability to issue tokens similar to other smart contract platforms, so crypto developers will be able to have both fungible and non-fungible tokens running on top of Synapse.