This comprehensive blog delves deep into the realm of blockchain scalability, aiming to provide you with a thorough understanding of its significance, solutions, consensus mechanisms, challenges, and future trends.

The Blockchain Scalability Trilemma

What is Blockchain Scalability

Why is Scalability Crucial for Blockchain

The Growing Need for Scalable Blockchain Solutions

Blockchain Scalability Solutions

Blockchain Consensus Mechanisms and Scalability

Challenges and Trade-offs in Scalability

Future Trends in Blockchain Scalability

Summary

The Blockchain Scalability Trilemma

The term ‘Scalability Trilemma’ was first coined by Vitalik Buterin in 2018 because it is believed that there is an inherent tension between the three crucial elements on which blockchain was built and that it is difficult for a blockchain network to achieve optimal levels of all three. 

The three crucial elements of the blockchain are decentralization, security, and speed. Among these, decentralization and security take center stage as the foundational design principles. They collaborate closely to fortify the blockchain against potentially devastating attacks. However, this partnership often involves a trade-off with speed and scalability, which refers to the blockchain’s ability to handle more transactions and grow. 

Firstly, security is at the core of blockchain’s strength. It relies on consensus mechanisms like Proof of Work (PoW) or Proof of Stake (PoS) to ensure the validity and security of transactions. Nevertheless, as transaction volumes rise, maintaining this high level of security becomes more complex.

Secondly, decentralization is a fundamental principle of blockchain, ensuring that no single entity has control over the network. Upholding decentralization is vital for trust and transparency. However, solutions aimed at increasing scalability sometimes introduce risks of centralization.

Lastly, speed is crucial for blockchain to compete with traditional financial systems, which process transactions swiftly. Yet, enhancing transaction speed can potentially lead to security vulnerabilities or compromises in decentralization. Balancing these three elements is an ongoing challenge for the blockchain industry.

This trilemma creates a challenging situation for blockchain developers, requiring them to find a delicate balance between security, decentralization, and transaction speed.  Also, some have suggested that making blockchain faster and more capable might make it less secure and less decentralized. Moreover, achieving scalability while maintaining the pillars of security, decentralization, and speed requires innovative solutions and trade-offs. 

However, it’s essential to realize that improving scalability is crucial for blockchain networks to effectively compete with traditional centralized platforms. By striking the right balance, blockchain networks can continue to evolve and revolutionize various sectors, realizing their full potential.

What Is Blockchain Scalability?

Imagine a highway during rush hour. When there are only a few cars on the road, it flows smoothly and without delays. However, as more and more vehicles join the commute, traffic jams start to appear, slowing down the journey for everyone irrespective of what side of the road they are on. Just as widening the highway or finding more efficient routes can alleviate congestion, blockchain scalability solutions aim to ensure a smooth flow of transactions even as the network becomes busier.

Simply put,

“Blockchain scalability refers to the ability of a blockchain network to handle an increasing number of transactions or data without compromising its performance, security, or decentralization.” 

Scalability is a key metric that determines a blockchain’s usability and effectiveness in the real world.

Why Is Scalability Crucial for Blockchain?

Scalability is an essential need for blockchain for several reasons. Some of them are:

• Increased Transaction Throughput: Scalability in blockchain allows for more transactions to be processed per second. This is essential because traditional blockchains like Bitcoin and Ethereum have faced issues with slow transaction processing times and high fees due to limited scalability. More scalable networks record faster transaction throughput than them.
• Mass Adoption:  To become a viable alternative to traditional systems, blockchain networks must accommodate a large number of users and transactions. Scalable blockchain networks can accommodate a larger number of users and applications, making them more appealing to businesses and individuals. 
• Reduced Costs: Scalability can lower transaction fees, making blockchain applications more affordable and accessible. This is important for users and businesses as blockchain networks that can scale effectively can reduce the cost of conducting transactions or running decentralized applications (dApps).
• Ecosystem Growth: Scalability also encourages the growth of the blockchain ecosystem. Scalable blockchain networks attract developers to build innovative dApps, attracting more users and investors, and creating a self-reinforcing growth cycle.
• Interoperability: Scalability can facilitate interoperability between different blockchain networks. Scalable solutions like Layer 2 solutions or cross-chain protocols enable blockchain networks to work together more efficiently.

The Growing Need for Scalable Blockchain Solutions

Blockchain scalability has become a critical concern due to the increasing adoption of blockchain technology across various industries. Blockchain emerged as a system that allows interaction without the need for a central authority. In this network, all the nodes are equals, and you might wonder how things work smoothly without someone in charge. Well, every single node in the network is built with the capability to take charge and ensure seamless transactions.

But here’s the catch: The surge in users and transactions has placed a significant strain on blockchain networks. This is what we call the blockchain scalability problem. Even though blockchain has been around for quite a while, this issue with handling lots of transactions can slow down its progress and make it harder for mass adoption.

According to a 2018 research report by Tata Communications, 44% of the organizations they surveyed were starting to use blockchain. However, the study also hinted at the common challenges that come with introducing new technologies.

Early networks like Bitcoin and Ethereum suffered from slow transaction speeds and high fees, which hindered their ability to handle large transaction volumes. This limitation further prompted the industry to seek scalable solutions to accommodate the growing demand for blockchain services. 

Furthermore, the rise of enterprise use cases, decentralized finance (DeFi), and non-fungible tokens (NFTs) have further emphasized the need for scalability. Enterprises now require blockchain platforms capable of efficiently handling a multitude of transactions, while DeFi and NFT applications have driven up transaction activity. In this competitive landscape, it is necessary for blockchain projects to prioritize scalability to remain attractive to both developers and users. 

Read More: 10 Blockchains With the Highest Transaction Speeds in 2023

Blockchain Scalability Solutions

Blockchain scalability solutions come in various forms, each with its own set of advantages and trade-offs. Here are some of the most prominent ones:

Layer 1 vs. Layer 2 Scaling Solutions

The primary goal of Layer 1 scaling solutions is to operate independently, as evidenced by their self-sustaining and foundational nature. They encompass all essential components, including the data availability layer, consensus layer, and execution layer, within their framework. Layer 1 scaling solutions are primarily focused on enhancing the foundational layer of a blockchain, while Layer 2 solutions are designed to build upon this foundation. 

Layer 2 solutions within the blockchain domain are specialized protocols crafted to augment the scalability, privacy, and other aspects of the underlying Layer 1 blockchain, whether it’s Bitcoin or Ethereum. These solutions encompass various approaches, including state channels, sidechains, optimistic Rollups, and zero-knowledge roll-ups.

A notable Layer 2 solution is Sidechains, which are separate blockchains interconnected with a primary chain, facilitating asset transfers between them. Although sidechains enhance interoperability, they rely on their security mechanisms, such as Proof-of-Stake or Proof-of-Work.

Optimistic Roll-ups, tailored specifically for Ethereum, also offer an alternative Layer 2 approach by permitting off-chain execution of smart contracts. This reduces the strain on the Ethereum network and lowers transaction costs. However, it introduces an “optimistic” assumption about transaction validity, requiring a verification period before funds can be withdrawn to the Ethereum main chain. 

Finally, Zero-Knowledge Rollups utilize zero-knowledge proofs (ZK-proofs) to validate batches of transactions while disclosing minimal data to the main chain. This technology bolsters blockchain privacy, enabling transaction verification without revealing sensitive information, and holds significant potential for secure data transmission in enterprise applications. These Layer 2 solutions address scalability, cost efficiency, and privacy concerns.

Notable examples of ZK-rollup blockchains

Starknet, developed by Starkware, has entered its Alpha phase on the Ethereum Mainnet. It operates as a permissionless decentralized Layer 2 blockchain powered by zk-rollups. Like other Layer 2 solutions, Starknet processes transactions and bundles transaction data into batches, secured by STARK proofs.

Polygon ZK EVM also launched its Mainnet on the 27th of March, 2023. In addition to this, Polygon offers a privacy-focused ZK-enabled roll-up known as ‘Nightfall,’ developed in collaboration with Ernst & Young, with a specific focus on enterprise use cases.

These ZK-rollup solutions are proof of advancements in blockchain technology, emphasizing scalability and privacy enhancements.

Sharding

Sharding, as a technological concept, predates the blockchain industry and has its origins in a technology known as “database partitioning.” 

“It involves the distribution of a single dataset across multiple databases, which are then stored on multiple machines.”

This enables the division of large datasets into smaller segments stored on various data nodes, effectively expanding the system’s storage capacity. When data is distributed across multiple machines, a sharded database can accommodate a greater volume of requests compared to a single machine.

This approach ensures that each node isn’t burdened with handling the entire network’s transactional workload. Instead, each node is responsible for managing data related to its specific division or shard.

However,  a shard’s information may still be accessible across other nodes, this maintains the ledger’s security and decentralization, as every node retains the ability to view all ledger entries; they simply do not process and store every piece of data.

In the blockchain, 

“Sharding is a scalability technique that divides a blockchain’s network into smaller, manageable segments called ‘shards’.”

 Each shard possesses its distinct data, setting it apart from the other shards and giving it a unique identity. The function of each shard is to process a portion of transactions, enhancing scalability by parallelizing transaction processing. 

The primary benefit of implementing sharding in a blockchain is a notable enhancement in scalability. Sharding enables a blockchain to incorporate more nodes and accommodate larger volumes of data, all without causing significant delays in transaction processing. This capability has the potential to accelerate the adoption of blockchain technology across various sectors.

Zilliqa is the first public blockchain platform to successfully implement sharding. Furthermore, the Ethereum Foundation has intentions to incorporate sharding into Ethereum 2.0.

Additionally, there are other blockchain initiatives, such as Cardano and QuarkChain, that have either adopted sharding or are in the process of adopting it as a strategy to address scalability challenges.

State Channels and Off-Chain Scaling

This Layer 2 solution is the process of off-chain interactions between participants. 

“It means that users can conduct transactions directly with each other outside of the blockchain, reducing the need for on-chain operations.”

This method allows them to transact privately without the involvement of the main blockchain. 

At a superficial glance, it may appear that transactions within state channels lack the same security as on-chain transactions. However, it is exciting to know that these off-chain transactions are also backed up by the same level of security as those performed on-chain.

Notably, the key insight here is that an equivalent level of security can be achieved while conserving network resources all at the same time. Additionally, each transaction is signed in the same manner as a valid Ethereum transaction, ensuring a robust security protocol.

This method takes the pressure off the main blockchain and also enhances the throughput of public blockchains by reducing the computational burden on nodes when handling and storing transactions. This helps greatly with scalability.

Read More: What Is Delegated Proof Of Stake Consensus?

Blockchain Consensus Mechanisms and Scalability

A consensus mechanism is like a digital referee for blockchain transactions. It ensures that all participants in the network agree on the validity of transactions.

Consensus mechanisms serve as a foundational pillar of blockchain technology. This is because it enables decentralized networks to achieve consensus regarding the network’s state and the validity of transactions.

Take for instance; there’s a group chat where a number of friends decide what movie to watch. Everyone needs to agree on the movie choice; otherwise, it’s chaos. Similarly, in a blockchain, 

“Consensus mechanisms ensure that every participant agrees on the order of transactions and that they’re not altered or tampered with. Without this agreement, the effectiveness of a blockchain network is compromised because these participants require assurance that transactions remain unaltered and untampered with.”

The pioneer cryptocurrency, Bitcoin which came to be in 2009 employed a Proof of Work (PoW) consensus mechanism. However, over time, PoW’s limitations have come into view with challenges related to speed, scalability, and substantial energy consumption.

Consequently, to address these challenges, alternative mechanisms like Proof of Stake, have been devised. These various consensus algorithms employ distinct approaches and work differently to validate transactions. However, the overall aim is to make blockchain networks faster and more energy-sufficient. It’s like trying different methods to cook a meal – each one has its own recipe for success!

Proof of Stake (PoS) and Scalability

According to Garrick Hileman, the head of research at Blockchain.com when he was interviewed by Business Insider,

“In Proof-of-Stake, the cryptocurrency holders’ vote’ to approve legitimate transactions. As a reward for voting on legitimate transactions, ‘stakers’ are paid in newly created cryptocurrency over time.”

Proof-of-Stake is a consensus mechanism that represents the primary competitor to Proof-of-Work’s reliance on hardware and electricity for its operation. It eliminates energy-intensive mining and enhances scalability by allowing validators to create new blocks based on their stake in the network.

The protocol was first designed by the acclaimed developer Sunny King in 2011. The process, however, took a significant step forward in 2012 when King released the official whitepaper explaining the PoS algorithm. In the same vein, Peercoin was the first cryptocurrency to adopt this mechanism in 2012.

The awesome thing is that PoS offers improved scalability and faster transaction processing as opposed to PoW. This is because it doesn’t require solving extremely complicated equations, allowing transactions and blocks to be confirmed more swiftly.

Also, PoS doesn’t depend on physical machines to achieve consensus. As a result, it’s more scalable. Since it’s a simpler and more energy-friendly process, there’s no requirement for massive mining operations or extensive energy resources. Adding more validators to the network becomes a more cost-effective, straightforward, and accessible process.

Proof of Stake (PoS) currently stands as the dominant consensus mechanism embraced by well-known networks such as Ethereum (ETH), BNB, and Avalanche (AVAX). 

Delegated Proof of Stake (DPoS) for Faster Transactions

The Delegated Proof-of-Stake (DPoS) consensus mechanism operates through a democratic process. In simple terms,

“Network users participate in a voting system to select delegates, also known as witnesses or block producers, who will be responsible for validating blocks.”

Each blockchain using this consensus method has a set limit on the number of delegates chosen for each block, and this number can vary from one blockchain to another. Consequently, the delegates for one block may not be the same as those for the next.

To determine these delegates, users cast their votes by pooling their tokens into a staking pool and associating them with a specific delegate. The delegate who accumulates the most tokens is then granted the privilege of validating a block and earns transaction fees as a reward. Subsequently, the delegate distributes these rewards to users who support them, based on each user’s stake.

Crucially, users retain control over the system, allowing them to vote out delegates if they engage in malicious activities on the network. Consequently, delegates with strong reputations are typically elected as witnesses, ensuring the integrity of the DPoS system.

Due to the network’s limited number of delegates, the consensus is quicker and as a result of this, enhanced performance is ensured. Delegated Proof-of-Stake (DPoS) is a more specialized and less commonly utilized method. 

Examples of DPoS

The initial version of DPoS emerged in 2014, courtesy of Dan Larimer, who served as the former Chief Technology Officer (CTO) of EOS. Larimer introduced this consensus algorithm for the first time on the decentralized cryptocurrency exchange platform, BitShares, in 2015. 

Currently, EOS operates as an open-source blockchain renowned for its scalability and minimal latency, with a fixed group of 21 delegates responsible for transaction validation and the addition of new blocks. 

Also, Tron, founded by Justin Sun, operates as a cost-effective platform where delegates bear the title of Super Representatives (SRs). Users participate by staking TRX tokens to vote for five SRs during each election, with the top 27 candidates selected becoming witnesses. Meanwhile, Sui, developed by former Meta engineers, boasts exceptional speed and cost-efficiency as a decentralized blockchain. It employs a set of fixed validators chosen by SUI token holders based on their share of the total stake. 

Byzantine Fault Tolerance (PBFT) and Scalability

In 1999, Miguel Castro and Barbara Liskov introduced the PBFT protocol as a solution to address the challenges posed by the Byzantine Generals Problem. This concept draws its name from this hypothetical scenario known as the Byzantine Generals Problem, which revolves around a group of Byzantine generals facing a challenging logical dilemma.

“Byzantine Fault Tolerance refers to a computer system’s capability to maintain its operation even in the presence of node failures or malicious behavior.”

To complete a transaction successfully, a collective of nodes must reach a consensus on its validity. Every blockchain network adheres to a specific set of rules, known as a consensus algorithm, which dictates how its nodes come to an agreement regarding transactions.

This consensus algorithm essentially enables a blockchain to attain Byzantine Fault Tolerance. In the world of cryptocurrencies, which are decentralized by nature, this involves addressing a grand-scale version of the Byzantine Generals Problem. The blockchain must be capable of operating reliably even in the presence of malfunctioning nodes or nodes that may be intentionally sharing incorrect information.

The goal of a Byzantine Fault Tolerance (BFT) mechanism is to protect the system from failures by utilizing a process of collective decision-making involving both correct and faulty nodes. This approach aims to minimize the impact of the faulty nodes on the system’s integrity and as a result, improve the scalability of the network. BFT is a consensus algorithm that can achieve high throughput and low latency, making it suitable for scalable blockchains.

Challenges and Trade-offs in Scalability

While scalability is paramount, it comes with challenges and trade-offs:

Security vs. Scalability

Security is a paramount factor in blockchain. It is what ensures that transactions are tamper-proof and that the integrity of the ledger is maintained. Traditional blockchain networks like Bitcoin, which use the Proof of Work (PoW) consensus mechanism, excel in security and that is because PoW is incredibly robust against attacks due to its computational intensity.

On the other hand, scalability refers to a blockchain’s ability to handle an increasing number of transactions. In essence, it is the network’s capacity to grow and serve more users and applications. Scalability is vital for blockchain’s widespread adoption because it ensures that the network can handle the load without slowing down or becoming congested.

However, herein lies the dilemma: as blockchain networks grow, they tend to become slower and more resource-intensive due to the increased security measures. The challenge is to find ways to maintain a high level of security while simultaneously improving scalability.

It is believed that increasing scalability can potentially compromise network security. Striking the right equilibrium and balance between the two is essential for sustainable growth.

Read More: What are Decentralized Autonomous Organizations? A Brief Introduction.

Interoperability Challenges in Scalable Blockchains

“Interoperability is the ability of different blockchain networks to communicate and work seamlessly together.”

Achieving interoperability is crucial for fostering a connected blockchain ecosystem where various chains can interact and share data and assets. This is particularly important for industries like finance, supply chain, and healthcare, where data must flow freely and securely.

Scalability, on the other hand, refers to a blockchain’s capacity to handle an increasing number of transactions efficiently. It’s about enabling a blockchain network to grow without becoming congested or slow. Scalability is essential for mainstream adoption, ensuring that blockchain can handle the demands of a global user base.

As blockchain networks scale, interoperability becomes a challenge. The challenge majorly arises from the fact that improving one often comes at the expense of the other. Enhancing interoperability can make a blockchain more complex and potentially compromise scalability while focusing too much on scalability might hinder a blockchain’s ability to interact with other networks.

Future Trends in Blockchain Scalability

In recent years, scalability has emerged as a major concern to blockchain networks. Now, exciting trends and developments that promise to address the scalability challenges faced by blockchain networks are being worked on. This will usher in a new era of efficiency and accessibility for users and developers alike. The future of blockchain scalability looks promising with these developments. Let’s take a look at two notable ones:

Ethereum 2.0 and Its Scalability Enhancements

Scalability has consistently posed a major challenge for the Ethereum platform. This is because with the growing adoption of decentralized applications on the network, there is an exponential surge in transactions and this is a pressing concern. Also, as the volume of transactions surged within the Ethereum network, so did the associated gas costs. 

Now, this begs the question: if Ethereum aims to serve as the foundation for the next generation of the Internet, how is that viable with these challenges? Won’t its practicality diminish significantly?

Ethereum 2.0. is the answer to these questions. Also known as Eth2 or Serenity,  this is the long-awaited revolution and upgrade to the Ethereum network.  The proposed upgrades under Ethereum 2.0 primarily target the scalability problem. Its central premise is the enhancement of network scalability while maintaining security and decentralization. This upgrade occurred in a series of three consecutive phases. The initial phase involved the introduction of the beacon chain in 2020, followed by the merger in September 2022, and ultimately culminating in the implementation of sharding.

Fortunately, Ethereum 2.0 is poised to overcome the challenges of the previous version by introducing significant features that will set it apart from the Ethereum we are familiar with, ushering in a new era of improved speed, efficiency, and scalability.

Key Features of Ethereum 2.0

• Enhanced Energy Efficiency: Ethereum is set to achieve a staggering 99.95% improvement in energy efficiency, potentially eliminating the need for power equivalent to that of an entire nation.
• Sharding for Efficiency: Ethereum will undergo a transformation into 18 individual “Shards,” operating concurrently to significantly boost network efficiency.
• Transition to Proof-of-Stake: Ethereum will make the transition to a Proof-of-Stake Consensus mechanism. This will enable widespread participation in network security through staking.
• Enhanced Security Measures: Proof-of-Stake will render compromising the network considerably more costly. Additionally, the transparency of validator addresses will make it easier to identify potential attackers, allowing for the possibility of forking them away from the network.

Notably, achieving this has been a long-standing goal. However, due to the inherent complexity of securely scaling a blockchain, it necessitates several years of development. 

Cross-Chain Solutions for Scalability

One solution with a lot of potential for the scalability challenge is cross-chain functionality. 

“Cross-chain functionality in blockchain refers to the ability of different blockchain networks to communicate, interact, transfer data, and share information with each other.”

This functionality improves flexibility, and facilitates seamless interaction and data exchange between diverse blockchain networks, offering enhanced scalability and adaptability. Consequently, decentralized applications (dApps) can harness multiple blockchain networks instead of being confined to a single one. By distributing their workload across various networks, dApps can significantly bolster their scalability.

The advantages of cross-chain functionality are particularly pronounced in the realms of decentralized finance (DeFi) and decentralized autonomous organizations (DAOs). These applications demand substantial scalability due to their handling of extensive financial transactions and data. Through the utilization of cross-chain functionality, DeFi and DAOs can expedite their transactions.

For instance, within the DeFi sector, cross-chain functionality facilitates seamless transactions across different blockchain networks. This, in turn, opens up access to a wider array of financial services and products, such as lending, borrowing, and trading, without being hindered by the constraints of a single blockchain network. Furthermore, it ensures that DeFi dApps process transactions swiftly and efficiently.

DAOs also reap the rewards of cross-chain functionality. DAOs operate as decentralized organizations managed by their members, rather than a central authority. With cross-chain functionality, DAOs can streamline transactions even during high-traffic periods. This enables swift decision-making and action execution, without being constrained by the limitations of a single blockchain network.

Notably, cross-chain functionality has the potential to mitigate the scalability issues that plague blockchain networks to a large extent. By enabling interoperability among different blockchain networks, it significantly enhances the system’s flexibility and efficiency. Also, cross-chain bridges and data interoperability reduce the dependence on centralized intermediaries, resulting in lower transaction fees and quicker transaction processing times.

Read More: Here’s Everything You Need to Know About Ethereum 2.0!

Summary

Despite blockchain’s prominence, public blockchain networks like Bitcoin and Ethereum have not disrupted as many industries as largely expected. This is due to the fundamental problem of scalability. 

This issue has become a significant concern, particularly when applying blockchain in real-world business scenarios. Notably, major cryptocurrencies are also grappling with scalability problems. 

In this blog, it is obvious that scalability is a multi-faceted concept encompassing factors that are often interrelated and connected, directly or indirectly, to the choice of consensus mechanism. It is safe to say that scalability in a blockchain network boils down to the choice of consensus mechanism.

Blockchain scalability is the key to unlocking the full potential of this revolutionary technology. As it continues to evolve and adapt to the demands of the digital age, scalable blockchain solutions will play a major role in ultimately transforming the way we interact with the digital world.

The post Everything You Need to Know About Blockchain Scalability appeared first on ChainElevate.

In this blog post, we will explore ten blockchains that can process transactions faster than you say ‘crypto’. However, before that, let’s talk briefly about the concepts of Blockchain Transactions and Transactions Per Second.

Blockchain Transactions

Transactions in the blockchain is the transfer of value, typically in the form of cryptocurrency, from one individual to another. 

Different blockchains have varying capabilities in handling transactions. For instance, Ethereum and similar virtual machines can run programs, while Bitcoin is primarily designed for payments.

Every transaction must be verified for authenticity by the blockchain network before it is added to a block. Once validated, the transactions become part of a unique block on the blockchain, each block having its own hash and referencing the previous block’s hash. This ensures the security and integrity of the blockchain’s transactions history. 

Now that we have a grasp of the concept of Blockchain Transaction, let’s delve into Transaction Per Second(TPS).

Transactions Per Second (TPS)

Transactions Per Second (TPS) refers to the measurement of the number of transactions a blockchain network can process within one second. It is a crucial metric that reflects the network’s scalability and efficiency.

Transactions speed play an important role in any blockchain platform. This is because it directly impacts the usability and accessibility of the network. With slow transactions speed, users may encounter delays and high fees, ultimately limiting the scalability and adoption of blockchain technology. Nobody wants that! Higher transactions speed allow for faster confirmation and settlement of transactions. This leads to improved user experience and enhanced trust in the technology. 

Furthermore, one thing that’s essential for blockchain’s mass adoption is scalability.

A high TPS enables this i.e.

it allows the network to accommodate a larger number of users and handle a substantial transaction load, making it more appealing for various applications. 

That being said, here are the 10 trailblazing blockchain networks that have mastered the art of lightning-fast transactions in no particular order. 

1. Stellar Lumens

Stellar was established in 2014 by visionaries Jed McCaleb and Joyce Kim. Jed McCaleb was the former founder of Ripple. He brought Stellar into existence in 2014 as a platform centered around its native token, Lumen (XLM). Since then, this decentralized, open-source blockchain platform has set out on a mission to facilitate fast, secure, and cost-effective cross-border transactions. 

At its core, Stellar aims to bridge the gap between people regardless of their location or financial standing. To achieve this, the platform has engineered a swift and efficient payment system that enables near-instantaneous cross-border transactions. Now, it boasts of an impressive processing speed of up to 1,000 transactions per second. 

The result is a financial ecosystem that empowers individuals globally, providing opportunities for economic growth and prosperity.

Also, transactions verification within the Stellar network relies on Unique Node Lists.

Thanks to a transaction settlement time ranging from 3 to 5 seconds, the Stellar network demonstrates an impressive processing capability, handling anywhere between 1,000 to 5,000 transactions per second.

During a meetup in Singapore in 2017, Lindsay Lin, the Program Manager at Lightyear, mentioned a reference to 1000 transactions per second (tps).

As reported by forestsuggest.com, Stellar outperformed Ethereum and similar platforms in transactions processing speed, taking the lead in transactions per second in the year 2021.

2. Ripple (XRP)

Did you know that unlike many other cryptocurrencies, Ripple doesn’t require mining for new coins?. All 100 billion XRP tokens were created at the inception of the blockchain, making it a pre-mined cryptocurrency. Only 40% of the entire volume is currently being traded on exchanges presently and Ripple Labs manages the remaining 60% itself. This unique feature sets it apart from traditional mining-based cryptocurrencies like Bitcoin and Ethereum.

In 2021, Ripple achieved a remarkable milestone, processing over 25 transactions per second and facilitating more than 2.2 million daily transactions. Launched in 2012 under the name Opencoin by 3 computer engineers with high interest in Bitcoin, Ripple (XRP) functions as a digital payment protocol, enabling cost-effective and nearly instantaneous international transactions. 

A prominent feature of this blockchain network is its remarkable transactions speed. Transactions are settled on the XRP Ledger within 3-5 seconds, as indicated on the official Ripple website. Now, the blockchain network can process up to 1,500 to 2,000 transactions per second.

This exceptional transactions speed is attributed to its distinctive consensus algorithm which was purposely crafted to validate transactions instantly. Ripple Labs did a great job of setting itself apart by implementing its distinctive consensus algorithm called the Ripple Protocol Consensus Algorithm (RPCA). This is a far cry from the conventional blockchain networks that utilizes proof-of-work or proof-of-stake algorithms. 

In comparison to other cryptocurrencies such as Bitcoin and Ethereum, Ripple’s swiftness stands out as a notable advantage.

3. TRON

TRON is another blockchain platform known for its impressive transactions speed. It was founded by Justin Sun, a well-known entrepreneur and protégé of Jack Ma, the founder of Alibaba Group. Justin.  Also known as Tronix, TRX serves as the native cryptocurrency of the Tron blockchain. 

On 28th February, TRON Community tweeted that TRON [TRX] outpaced other major cryptocurrencies like Ethereum [ETH], Bitcoin [BTC], and Ripple [XRP] in terms of TPS (transactions per second). At that moment, TRON’s TPS had reached an impressive 88.20.

The Tron platform was specifically designed to support decentralized applications (DApps), enable smart contract execution, and promote the widespread use of decentralized finance.

The Tron blockchain was definitely built with scalability in mind because how do you explain the performance rate? Also, the network utilizes a delegated Proof of Stake PoS consensus mechanism and side chains to handle a high volume of transactions. This significantly expedites and reduces the expenses associated with the validation process. In comparison to Ethereum’s capacity of handling 25 transactions per second (TPS), Tron’s blockchain achieves an impressive 2000 tps processing speed.

4. EOS.IO

EOS blockchain network is a platform with an open-source nature that empowers third-party developers to build and operate decentralized applications, commonly referred to as dApps. In 2018, EOS launched as a Blockchain platform by Block.one with the primary goal of providing a rapid and flexible framework for decentralized applications (dApps). 

Also, EOS.IO stands out as one of the fastest blockchains because of  its transactions reaching finality in just 2-3 seconds. As one of the most scalable Blockchain platforms in existence, this powerhouse blockchain can process thousands of transactions per second (TPS) and is capable of handling high-speed transactions like no other!

In comparison to the Bitcoin blockchain, which can handle around 4 TPS, and Ethereum’s approximate 15 TPS, the EOS network boasts an impressive capacity of processing up to 4,000-7,000 TPS. This remarkable speed allows developers to release dApps more swiftly. Also, it ensures that front-end app users do not face prolonged waiting times to confirm message delivery or payment processing.

This lightning transaction speed this network possesses is made possible by EOS’s utilization of a delegated proof-of-stake (DPoS) consensus

In this system, validators, known as witnesses, collaborate to reach a consensus on the next validator responsible for verifying transactions. The voting power of each witness is proportional to their stake, ensuring a streamlined and efficient process.

5. Cardano

Named after Gerolamo Cardano, an Italian polymath and mathematician and considered a global blockchain initiative, Cardano (ADA) stands out as the first peer-reviewed and academically-developed blockchain, backed by a team of experts in the field. The team comprises engineers, academics, and even an Ethereum co-founder, Charles Hokinson. This diverse group made a distinctive choice in 2015—to construct a native blockchain from the ground up.

One of the platform’s primary strengths lies in its exceptional transactions speed. It has the capability to process over 1,000 transactions per second (TPS). During the initial testing of the Cardano chain in 2017, it demonstrated the capability to process up to 257 transactions per second (TPS) and thus, marked for greatness. Now, the current speed surpasses Bitcoin’s transaction capabilities and is on par with other high-speed Blockchain platforms like EOS.

To achieve this remarkable transaction speed, Cardano employs a unique consensus algorithm called Ouroboros. This algorithm utilizes a Proof-of-Stake (PoS) approach and this is what enables the faster transactions processing and higher transactions throughput. Additionally, Cardano has implemented other enhancements to further boost its transactions speed, such as the Hydra Layer 2 scaling solution. This innovation enables multiple transactions to occur simultaneously, thereby increasing transaction throughput even more.

Rumor has it at one point that Cardano would soon start processing 1 million transactions per second. However, the developer has dismissed those rumors.

6. Solana

Solana, developed by Solana Labs, a technology company based in San Francisco in 2020, is a high-performance blockchain network designed for decentralized applications and digital assets. This blockchain platform is specifically aimed at addressing the scalability challenges faced by other blockchain networks.

What sets Solana apart is its combination of two innovative techniques: Proof of History (PoH) and Proof of Stake (PoS) consensus mechanisms. 

With PoH, each transaction on the Solana blockchain is timestamped using a cryptographic clock, significantly reducing transaction validation time. On the other hand, PoS involves validators, or “stakers,” who verify and add transactions to the blockchain. The fusion of these two methods enable it to process transactions at an impressive speed of 3,000-65,000 TPS (with theoretical capacity reaching up to 710,000 TPS).

This exceptional transactions speed, combined with its focus on security and cost-effectiveness, makes Solana one of the fastest blockchain networks available. Also, it is an excellent choice for various decentralized applications, including DeFi platforms, gaming, and content delivery.

Solana’s architecture also plays a vital role in achieving its transaction speed as it is designed to be highly parallelizable. This means multiple transactions can be processed simultaneously, leading to enhanced throughput and scalability.

Additionally, Solana utilizes a unique mechanism called Tower BFT. This serves as an extra tool to ensure swift block confirmation times while maintaining network security and decentralization. Also, this combination of innovative techniques makes Solana a leading contender in the quest for a scalable blockchain platform.

Overall, Solana stands out as one of the fastest and most efficient blockchain networks available today. It has positioned itself to play a pivotal role in the ongoing expansion and advancement of decentralized technology.

7. Ethereum 2.0

Ethereum’s co-founder, Vitalik Buterin, was just 19 years old when he published the Ethereum whitepaper, outlining the vision for the platform.

Now, Ethereum is one of the most prominent blockchains. Also, it is in the process of transitioning from a proof-of-work (PoW) to a proof-of-stake (PoS) consensus mechanism with Ethereum 2.0. One of the most noteworthy advancements of Ethereum 2.0 is its potential to dramatically increase the platform’s transactions speed. 

While Ethereum 1.0 struggled with around 15 TPS, Ethereum 2.0 is projected to offer an astounding leap in scalability. Estimates suggest that it could ultimately process up to 100,000 TPS. This exponential boost in transactions speed is set to open new horizons for decentralized applications, decentralized finance, and various other use cases. Ultimately, fostering a more seamless and dynamic blockchain ecosystem.

8. Cosmos Hub(Atom)

In 2014, Cosmos was founded by two Software Engineers,  Jae Kwon and Ethan Buchman. Their vision was to establish a decentralized network consisting of autonomous and interconnected blockchains and it was this vision that conceived the Cosmos ecosystem. This ecosystem was  designed to facilitate decentralized and trustless communication and data sharing among diverse blockchains. 

Additionally, this interconnectedness facilitates collaboration between blockchains, streamlining the development of decentralized applications (DApps) by developers and enhancing user accessibility.

Fueling the Cosmos network is the Tendermint consensus algorithm, masterminded by the two visionaries, Buchman and Kwon. Tendermint is renowned in the blockchain industry for its robustness, efficiency, and scalability. Also, because it is built on a Byzantine Fault Tolerance Protocol(pBFT), Tendermint core maintains its functionality even and especially when a certain proportion of network validators experience failures. Due to this choice of consensus mechanism, Cosmos can process up to 10,000 transactions per second. 

• Block Finality Time: 1-2 seconds
• Low transaction fees: $0.01
• Transactions Per Second (TPS): 10,000 
• Validator Nodes: 175
• Nakamoto Coefficient: 8

9. Waves

This blockchain platform is a unique and energy-efficient one that is designed for building custom digital assets and decentralised applications using blockchain. As opposed to the usual consensus mechanisms, Waves uses a consensus mechanism called Leased Proof-of-Stake (LPoS). This is a modified version of Bitcoin’s proof-of-stake algorithm that reduces the time required to validate transactions. As a result of the modification, it allows for high and impressively fast transaction speed. It can process up to 6,000 transactions per minute and 100 transactions per second. 

Also, it replaces the energy-intensive Proof-of-Work (PoW) algorithm with a more efficient and environmentally friendly mechanism. This further allows the network to process transactions more quickly.

Additionally, Waves implements a sharding protocol to divide the network into smaller segments, or shards. With sharding, the overall transaction processing capacity increases, and each shard can handle a certain amount of transactions independently. This parallel processing capability significantly improves the TPS of the network.

Lastly, to enhance TPS, the platform  introduced smart accounts and dApp (decentralized application) optimization. By reducing the complexity of executing smart contracts and making them more streamlined, Waves achieves faster processing times. All of these applications combined have helped to increase Waves TPS overtime.

10. NEO

Originally created under the name Antshares by Da Hongfei and Erik Zhang in 2014, it was rebranded and renamed Neo in 2017. This blockchain platform implements  smart contracts. Also, it is designed to be used in building a smart economy where anyone can create and transact decentralised products and services. 

Neo utilizes a unique consensus mechanism called Delegated Byzantine Fault Tolerant (dBFT). This is as opposed to the mainstream delegated Proof of Stake or Proof of Work. However, the dBFT is similar to quite a number of Proof of Stake mechanisms in more ways than one.

In 2020, the Neo St Petersburg Competence Center released a document detailing Neo3’s performance result and latest improvements. The team evaluated that the second version of dBFT, that is the dBFT 2.0 could process 1,000 transactions per second at the time. The founders then realized that with the right optimization, NEO could process a minimum of 10,000 tps. The vision was eventually actualized. Now, NEO can process up to 10,000 transactions per second and that’s with an average time of 15 seconds.  

Summary

A high TPS rate allows more transactions to be executed within a given time frame. It is particularly important for financial applications, decentralized exchanges, gaming platforms, and any other use cases that require near-instantaneous transaction confirmations.

Also, the top 10 blockchains with the highest TPS each bring their own unique strengths to the table. As the blockchain ecosystem continues to evolve, we can expect even greater TPS achievements that will fuel the innovation and progress of this technology.

The post 10 Blockchains With the Highest Transaction Speeds in 2023 appeared first on ChainElevate.

Well, fret not; we’ve got you. In this blog post, we’ll go through what a blockchain requirement analysis is, why doing one is necessary, and some problems one may face while doing it.

If you’re here, you know Web3. Web3 is an iteration of the internet that’s all about decentralization, privacy, and trustless environments for peer-to-peer data transfers.

While some of you are aware of the pros of blockchain technology, you’re trying to integrate it into your business. And if you are struggling with the right blockchain technology infrastructure for your business, try doing a blockchain requirement analysis.

Blockchain Requirement Analysis: What Is It And Why Must You Do One?

“Requirement analysis’ is defined as “the process of determining user expectations for a new or modified product.”

So, if you’re wondering what blockchain technology analysis is, we’re here to answer your query. Additionally, we’ll also tell you why you must do it.

Firstly, a blockchain requirement analysis is simply a requirement analysis of what you need before integrating Web3 into your business. The checklist helps you define your goals and gain clarity while starting your Web3 journey.

Further, requirement analysis is beneficial in understanding what you need. Unfortunately, many give up on the dream of decentralization for their businesses due to a lack of clarity.

Secondly, the benefits of a blockchain requirement analysis may be short-term or long-term. Thus enabling you to focus on integrating Web3 systems into your technology stack right away while maintaining focus on your long-term goals.

Thirdly, an analysis brings clarity to what the company needs to achieve its goals. Clarity comes from asking the right questions and clearing away your doubts, which gives you a better view of the bigger picture. 

Lastly, a requirement analysis can draw a timeline map for your future that reminds you of the next steps you need to follow in all domains of blockchain technology.

So, are you ready to do one yet? No? Well then, here we go, convincing you why doing a blockchain requirement analysis is essential.

Benefits of Doing A Blockchain Requirement Analysis

Well, #1 on the list should be time and money.

The two most precious resources you cannot afford to waste while taking care of an empire

Carrying out a blockchain requirement analysis will save you a lot of time and money so that you don’t waste your time searching for different Web3 stacks that may (or may not) benefit you (or your business).

Furthermore, you also need to realize that integrating Web3 requires specific hardware and may sometimes differ in the role it needs to play. Considering that you still need to analyze and identify how you want to integrate blockchain into your systems, a requirement analysis can help you save money by not letting you buy unnecessary hardware.

Well, apart from saving time and money, some other benefits of the blockchain requirement analysis are:

Clarity

One gains clarity after a requirement analysis to understand what one needs and wants to achieve.

One may realize that they need a specific tech stack to carry out load testing. Or perhaps different hardware to upscale and increase infrastructure. 

Gaining clarity in real-time goes a long way toward achieving your short- and long-term goals. It ensures you follow the mission and vision while adopting decentralization in your business

Defined Goals

Speaking of goals, you can gain insights for the next few months, years, and maybe even a decade. You can understand your purpose in adopting Web3 systems while integrating them properly.

Defining goals for network security, decentralization, privacy, or even interoperability and usability can provide a timeline for you to work on each part of the domain while incorporating Web3. 

Plan of Action

Timelines and a plan of action are crucial to bringing something to fruition. Well, Rome wasn’t built in a day, so let the good things take time and make your plan of action list.

Once you have clarity and have defined your goals, you can easily plan how to incorporate the blockchain tech stack into your systems. It’s okay to go slow and steady as long as you know where you are headed and how you plan to get there.

Progress on Adopting Web3

Some journeys can be lonely, and some can be long. This one could be a mix of both, and you wouldn’t want that.

Keeping a plan of action and not working on it is like labour saying, ‘I’m going to build a wall of bricks and cement,” but ending up doing nothing.

A blockchain requirement analysis can provide insights into the key stages of adopting the features of blockchain technology. This way, you can track your progress as you fulfil your dream of embracing Web3 in your digital stack.

Issues While Conducting A Blockchain Requirement Analysis

There are many issues one may face while doing this checklist. Well, you must beware and proceed to the checklist with caution (and some borrowed courage from this post).

In gratitude for what you’ve read so far, we’ll also provide tips on how to overcome the issues one may face while doing the analysis.

#1: Technical Nitty-Gritty 

As mentioned earlier, blockchain can be complex and sometimes overwhelming to know, learn, and understand. This technology deals with computing protocols, cryptography, the distribution of information, trustless environments, consensuses, and many other components. At times, these components work together so intricately that one must pay close attention to realize how they work together and create a decentralized, open, and reliable blockchain habitat.

Overcome this! Although understanding the complexities can be difficult, one can find many guides, blogs, and videos to learn about the concepts.

#2: Understanding and Defining Goals 

The blockchain serves many purposes, but it is not a one-stop solution for all the issues one faces. 

Thus, identifying, understanding, and defining the goal leads to knowing what you want the blockchain tech stack to do for you. Is interoperability needed to ease the collaboration process? Is it a decentralized storage system for easy access to files? Identifying the goal would lead you to make decisions in the future.

Overcome this! List out the different features of blockchain technology. For each feature, write down a pro, a con, and how it might help your goal. The list of pros, cons, and benefits can be insightful in shaping your goal.

#3: Timeline Mapping 

The project’s scope might be challenging and extensive when it involves blockchain technology. In addition to dealing with the numerous protocols found in and surrounding Web3, one must be able to effectively manage the project with clear requirements. 

Creating a timeline for your next steps and mapping out your plan is a great way to identify what technology you require at each step.

Overcome this! Understand your next steps and map your timeline. Make sure you know and have the required assets to carry out the project efficiently. 

#4: Regulatory Compliance

Blockchain runs on DAOs and governance that’s decentralized. A decentralized environment ensures a haven for information because data is immutable.

However, the mode of governance keeps changing as technology evolves with time. The blockchain must maintain security standards and decentralization. It must be able to operate in multiple jurisdictions without many challenges.

Overcome this! Learn how a DAO works and how governance in blockchain plays a role in maintaining the integrity of the blockchain. Also, beware of the multiple cyber laws and regulations that are constantly updated for users to comply with.

#5: Managing the project efficiently

After all of this, it’s crucial to maintain a robust team of developers, users, regulators, and engineers who understand the goals and the technical aspects of achieving the project goal.

Maintaining and managing the team must be efficient to ensure the progress of adopting Web3 goes well.

Overcome this! Maintain a timeline and a plan—for the short term and the long term—and make sure the team is aware of them. When the team is aware of the goals and deadlines, they can work together efficiently by addressing any issues they face.

Closing Statements

So, if you’re trying to incorporate distributed ledger technology into your business, we welcome you to Web3.

And you may feel lost while trying to welcome Web3 into your normal stack, but that’s a great reason why you must do a blockchain requirement analysis.

Further, doing a blockchain requirement analysis provides clarity, helps you define your Web3 goals, helps you plan your requirements, and streamlines your project.

And if you aren’t sure how to carry out a blockchain requirement analysis, fret not and download our Blockchain Requirement Analysis Workbook.

The post A Blockchain Requirement Analysis Can Help You; Find Out How! appeared first on ChainElevate.

But can one wallet do it all? Or do we need more? How many types of wallets exist? Let’s take a look at them and see their features.

Well, Web3 wallets can be classified into many types.

• Based on ownership, we have custodial and non-custodial wallets.
• Depending on where the wallet is present, we have hot and cold wallets.
• Based on utility, we have smart contract wallets and NFT wallets.

What are Custodial and Non-Custodial Wallets?

Custodial wallets are those that are not in the custody of the user. Seed phrases and private keys help secure the wallet. Many wallet service providers, like Metamask, Coin Base Wallet, etc., provide users with wallet services from their platforms or through applications.

A non-custodial wallet is where the user must take care of their own wallet. The user is provided with a public key, a private key, and a recovery or seed phrase. Some examples of non-custodial wallets are Trezor, Ledger, and Electrum.

Consequently, with the freedom to store your own private and public keys – custodial wallets are considered by many to be secure against hacks and threats.

Why Is A Wallet “Hot” or “Cold”?

A wallet is said to be “cold” when offline from the internet. A wallet connected to the internet or that works when connected to the internet is known as a “hot wallet.”

Cold wallets comprise paper wallets and tangible wallets. Paper wallets, as the name suggests, don’t mean that the wallet is on a piece of paper or that it is a fake wallet address. This time, the wallet is a scannable code to carry out transactions.

Further, tangible wallets, as the name suggests, are a real deal. You can carry it around in the form of a portable USB. And that contains your Web3 data, art, and assets.

Hot wallets, on the other hand, are intangible digital wallets. They are either present as a desktop app, a browser extension, or a mobile application. Consequently, all hot wallets are connected to the internet.

An added advantage of a hot wallet is that users can operate their wallets from a mobile phone or a personal computer.

Read More: The Best Web3 Wallets For 2023!

Are There Wallets Specific to NFTs?

You store your crypto coins in a Web3 wallet; Well, then how does one store non-fungible tokens? Well, you preserve them in Web3 wallets.

Can all wallets support NFTs? Answer: No. Are there wallets specific to NFTs? YES!

NFT wallets behave to provide a digital storage address for art and assets. However, as mentioned above, not all Web3 wallets support NFTs. Some handle cryptocurrencies, while some handle both cryptocurrencies and NFTs.

Digital wallets need to be compatible to store tokens on a particular blockchain. So the wallets can be synergic with the blockchain where the NFT is built.

What are some famous NFT wallets in 2023?

Some famous NFTs wallets are:

1. MetaMask
2. Trust Wallet
3. Coinbase Wallet
4. Exodus
5. Argent

What Are Smart Contract Wallets?

Imagine that your Web3 wallets have smart contract functionality. What would it mean for the wallet or for the user? It would mean security, safety, and power for your wallet to sign transactions with validators instead of private and public keys.

Simply put, smart contracts work with your wallet to let transactions happen. The autonomous code is responsible for wallet transactions. Whether it is to send an amount to a beneficiary or to receive a token, the code, upon pre-defined conditions, executes the function promptly.

Further, a smart contract wallet can take care of transactions and security. The wallets’ support for smart contracts includes attributes like account freezing, social recovery, and transfer limits. So, they are of great use and protective!

Smart contracts pave the way for a novel mode of wallet utilization. They are virtuous in many ways, some of which are:

• Autonomous execution of transactions
• Mediator-less transactions
• Executes function without fault
• Secures the payment with a smart contract account, i.e., the smart contract creates a paper account and carries the transaction. Autonomously carrying out a transaction means one is assured that the transaction was carried out safely.
• Transfer limits
• Account freezing/ account recovery
• Account abstraction

So, these are some of the various wallet types present in Web3. You can use a wallet to store NFTs, and cryptocurrencies, execute transactions via a smart contract and even carry it around as a USB.

Summary

Web3 Wallets are essential to store your cryptocurrencies and NFTs. More than that, they also act as a passcode to the Web3 universe. 

Users log in and interact with DApps with the help of Web3 Wallets. Assets and Art alike are accessible from one wallet address the user has. 

The wallets, however, are of many types… Users without custody of their own wallets have Custodial Wallets. It’s in control by a third party. Whereas, those who take care of their wallet have Non-custodial wallets.

A wallet is “Hot” when it is connected to the internet. Hot wallets are present as Web extensions, Mobile applications, and Web applications. A ‘Cold’ wallet is offline. It’s not connected to the internet in its tangible hardware form or in its QR code form.

Although wallets may store data and assets; not all wallets store NTFs. Thus the need for NFT wallets. These are special wallets that can store the digital art in whatsoever form present while being compatible with the blockchain where the NFT is held.

Lastly, we have smart contract wallets. Wallets with smart contract functionality. Permitting for autonomous execution of transactions, providing safety and securing the data.

The post Types of Web3 Wallets appeared first on ChainElevate.

Further, frameworks are designed to simplify the development process by providing a set of standardized building blocks that can be reused across multiple applications. They can create various software applications, from web apps to desktop and mobile applications.

Some popular frameworks in computer science include Django, Angular, and Ruby on Rails for web development. Each framework has its features and strengths, and developers can choose the one that best fits their needs and programming skills.

What Is A Web3 Framework?

Web3 framework is a collection of pre-written code and libraries. These enable developers to build decentralized applications (dApps) using blockchain technology. Therefore, frameworks provide a standard way of building applications for Web3, using the principles of blockchain technology.

Moreover, Web3 frameworks are built on top of the Ethereum blockchain. Ethereum is a Web3 platform that allows developers to code and execute smart contracts. Smart contracts are autonomous, self-executing codes with the agreement terms predefined between buyer and seller.

Further, some popular Web3 frameworks include Truffle, Embark, and Brownie. These frameworks provide tools and libraries that simplify the development of dApps, such as contract management, deployment, testing, and debugging. They also support the interaction with the Ethereum blockchain and other blockchain networks and integration with other web technologies.

Web3 frameworks are becoming increasingly popular as blockchain technology gains more mainstream adoption. Web3 frameworks enable developers to build decentralized applications that can provide a lot of benefits. Some of these merits are greater transparency, security, and trust. Moreover, they have the potential to revolutionize various industries, such as finance, healthcare, and supply chain management.

Need for Web3 Frameworks

There are several reasons why developers use Web3 frameworks to build decentralized applications (dApps) on blockchain networks:

1. Simplifying development: Web3 frameworks provide pre-written code and libraries that help developers to build dApps more efficiently by abstracting away low-level details and providing higher-level abstractions. This simplifies the development process and enables developers to focus on building the core features of their dApp.

2. Ensuring security: Web3 frameworks often provide security features, like secure coding practices, contract testing tools, and vulnerability scanning. These features can help to identify and mitigate potential security risks in the dApp, ensuring that it is secure and reliable.

3. Interoperability: Web3 frameworks provide means to enable coders to interact with different blockchain networks, and integrate them with other web technologies. This interoperability can help to create a more connected and decentralized web ecosystem.

4. Community support: Web3 frameworks are often backed by a vibrant developer community that provides support, resources, and feedback. This community can help to improve the quality of the dApp and provide valuable insights into best practices and emerging trends.

5. Standardization: Web3 frameworks provide a standardized way of building and organizing dApps on blockchain networks. This standardization can help to create more reliable and predictable dApps that are easier to maintain and upgrade over time.

Overall, Web3 frameworks provide a streamlined and secure way of building dApps on blockchain networks. Thus making it easier for developers to enter the rapidly growing world of decentralized applications.

Types of Web3 Frameworks

There are several types of frameworks in Web3, each with its own features and capabilities. Here are some of the most common types of frameworks in Web3:

1. Smart Contract Frameworks: These frameworks help developers write, deploy, and manage smart contracts on blockchain networks, such as Ethereum. Examples of smart contract frameworks include Truffle, Embark, and Brownie.

2. Blockchain Development Frameworks: These frameworks guide developers to create full-stack blockchain applications, including the front-end and back-end components. Examples of blockchain development frameworks include DappHub and Loom Network.

3. Web3.js Frameworks: These frameworks are designed to help developers interact with the Ethereum blockchain using JavaScript. They provide a set of libraries and tools that make it easier to work with smart contracts and other blockchain components. Examples of web3.js frameworks include ethers.js and web3.js.

4. Decentralized Application (dApp) Frameworks: These frameworks are designed to help developers build decentralized applications that run on blockchain networks. They provide a set of tools and libraries for building front-end and back-end components, as well as managing the deployment and scaling of the dApp. Examples of dApp frameworks include Embark and Drizzle.

5. Interoperability Frameworks: These frameworks help developers create interoperability between different blockchain networks, enabling them to transfer assets and data across different blockchain ecosystems. Examples of interoperability frameworks include Polkadot and Cosmos.

These are just a few examples of the different types of frameworks in Web3. Each type of framework provides unique capabilities and features that can help developers build better and more efficient decentralized applications on blockchain networks.

Libraries vs Frameworks

In Web3 development, both libraries and frameworks are important tools for building decentralized applications (dApps) on blockchain networks. Here are some key differences between Web3 libraries and Web3 frameworks:

Web3 Libraries:

A Web3 library is a collection of pre-written code that provides specific functionality for interacting with blockchain networks, such as Ethereum.

Web3 libraries often focus on a specific aspect of Web3 development, such as contract interaction, blockchain data retrieval, or transaction management.

They are typically smaller in scope and provide lower-level abstractions than Web3 frameworks.

Web3 libraries can help build custom solutions and integrate with other Web3 tools.

Examples of Web3 libraries include:

Web3.js: A JavaScript library for working on the Ethereum blockchain network.

ethers.js: A JavaScript library for interacting with Ethereum and other blockchain networks.

Ganache: A local blockchain simulator for testing smart contracts.

Web3 Frameworks:

A Web3 framework is a set of pre-written code and libraries that provides a standard way of building and organizing dApps on blockchain networks.

Web3 frameworks are typically larger in scope and provide higher-level abstractions than web3 libraries, abstracting away low-level details and providing a streamlined development process.

They are designed to simplify the development process and provide a set of standardized building blocks that can be reused across multiple applications.

Examples of Web3 frameworks include:

Truffle: A smart contract development and deployment framework for Ethereum.

Embark: A decentralized application development framework that provides front-end and back-end tools for building dApps on Ethereum.

DappHub: A full-stack blockchain development framework that provides tools for building dApps on Ethereum and other blockchain networks.

Overall, web3 libraries and web3 frameworks play crucial roles in web3 development. Web3 libraries provide specific functionality and can be used to build custom solutions, and Web3 frameworks provide a streamlined development process and standardized building blocks for building decentralized applications on blockchain networks.

Best Frameworks for Web3 in 2023

There are many frameworks available in Web3 to choose from. In such a case, how would you choose from the lot, and why would you choose only one?

Here, we’ve got 5. Not one, not two… five. The top five amazing Web3 Frameworks in 2023 are as follows:

Truffle

Everyone in the Web3 scene knows Truffle. A very sweet initiative by Ethereum, this is a popular smart contract development and deployment framework.

It provides a suite of tools for compiling, testing and deploying smart contracts, as well as a development environment for building dApps on Ethereum.

Embark

Embark is a decentralized application development framework that provides front-end and back-end tools for building dApps on Ethereum. It includes a development server, smart contract management tools, and a web3.js integration for interacting with the Ethereum blockchain.

DappHub

DappHub is a full-stack blockchain development framework that provides tools for building dApps on Ethereum and other blockchain networks. It includes a smart contract development environment, front-end development tools, and a decentralized hosting platform for deploying dApps.

Drizzle

Drizzle is a front-end development framework for building dApps on Ethereum. It provides a set of React components for interacting with smart contracts and blockchain data and a state management system for managing the application’s state.

Loom Network

Loom Network is a blockchain development platform that provides tools and infrastructure for building scalable dApps on Ethereum and other blockchain networks.

It includes a smart contract development environment, a decentralized hosting platform, and a set of interoperability tools for integrating with other blockchain networks.

These are just a few examples of the top web3 frameworks in 2023. Each framework provides unique features and capabilities for building decentralized applications on blockchain networks, and the choice of the framework will depend on the specific needs and requirements of the dApp being built.

The post What is a Framework? And what are Web3 Frameworks? appeared first on ChainElevate.

Oracles in Blockchain Technology

In blockchain technology, an oracle is a third-party application or service that provides off-chain data to a smart contract on a blockchain. Smart contracts are self-executing code that runs on a blockchain. These contracts operate in a trustless environment without mediators.

But smart contracts are limited to the data available on the blockchain. It cannot access external data from other off-chain data sources, such as real-world events or data from other systems.

Enter Oracles. Oracles provide a way for smart contracts to interact with external data sources by being a bridge between the blockchain and the world. For example, an oracle can obtain the current price of a stock, the temperature in a certain location, or the outcome of a sports game.

However, the use of oracles introduces new security and reliability challenges. Oracles are vulnerable to attacks like data manipulation or denial-of-service attacks. These attacks can compromise the integrity of the data they provide to smart contracts. Therefore, it is crucial to design and test oracles to ensure security and reliability carefully.

Overall, oracles play a crucial role in expanding the capabilities of smart contracts and enabling the integration of blockchain technology with the world.

The Need and Function of Oracles in Blockchain Technology

Oracles in blockchain technology are vital, as they link the blockchain to the external world. 

• The primary function of oracles is to provide off-chain data to smart contracts on the blockchain.
• Oracles enable smart contracts to interact with real-world events, such as the price of a stock, the weather conditions, or the outcome of a sports game. 
• Accessibility to external data is essential for smart contracts, as it allows them to perform many functions and automate more complex processes.

The need for oracles arises from the fact that the 

• Data stored on the blockchain is immutable, but limited to only the data available on the network itself. This means that 
• Smart contracts cannot access off-chain data sources without an oracle. 
• Oracles provide a secure and reliable way to obtain and verify external data, which is essential for the integrity of the smart contract’s execution.

In addition to providing data to smart contracts, oracles serve other functions, like triggering events based on external data, executing conditional contracts, and providing a way for smart contracts to interact with other systems. 

However, using oracles introduces new security risks to the blockchain ecosystem.

Oracles can be vulnerable to data manipulation or denial-of-service attacks, compromising the integrity of the data they provide to smart contracts. 

Therefore, it is necessary to carefully design and test oracles to ensure they are secure and reliable.

Advantages of Oracles in Blockchain Technology

Oracles provide several advantages in blockchain technology:

Access to external data: Oracles enable automated contracts to access external data. Accessing external data is essential for many blockchain functionalities. Automating complex processes and the execution of smart contracts are possible only because the contracts have access to external data.

Automation of processes: Oracles can automate the execution of processes that require external data, such as triggering a payment based on a particular event, without requiring intermediaries.

Flexibility: Oracle permits blockchain technology integration with other systems and technologies, such as IoT devices. The integration, in turn, expands the scope and potential uses of blockchain technology.

Security: Oracles provide a secure and reliable way to obtain and verify external data, which is essential for the integrity of the smart contract’s execution.

Decentralization: Oracles can be decentralized, which aligns with the principles of blockchain technology and eliminates the need for a central authority to provide external data.

Overall, oracles play a crucial role in expanding the capabilities of blockchain technology and enabling its integration with the world. Oracles extend blockchain technology’s application to a broader range of uses and industries by providing access to external data, automating processes, and improving security.

Summary

An Oracle is a software or a third-party service that provides information by predictions based on actions that have occurred in the past or recently. Oracles help make predictions with the help of data models and these aid humans to take informed decisions.

However, oracles in blockchain technology are used to provide off-chain data to smart contracts. By doing so, smart contracts can function better and automate their execution with ease.

Although Oracles extend their functions to create a better-decentralized way of functioning since it provides information from an external source, the decentral network has no power over the legitimacy of the data received.

Consequently, Oracles can be decentralized and web3 can be secure from misinformation. Once the security is taken off, the advantages such as external data access, flexibility, and process automation make working in web3 and deploying smart contracts a piece of cake!

The post What Is An Oracle In Blockchain Technology? appeared first on ChainElevate.

So, imagine if your DeFi wallet could now store multiple NFTs. Or your seed phrase in your wallet got lost. Or what if you could automate transactions from your wallet like a smart contract?

Well, account abstraction in Web3 turns those dreams into reality. And the Safe Wallet by the Gnosis chain is here to aid you on your journey to transition from your ordinary Web3 wallet to a smart contract wallet that is a game changer in Web3.

This blog explores Web3 wallets, account abstraction, and ERC 4337… and to top it off, we’re also looking at Safe Wallet from the Gnosis Chain and Wallet Connect.

We will also explore how Wallet Connect works with the SAFE wallet for a better UX.

A Brief on Web3, Cryptocurrency, and Web3 Wallets

Web3 is a decentralized iteration of the World Wide Web where data is open, transparent, accessible, and yet safe within the custody of the user and secure with encryption.

The idea for such a space came to Satoshi’s genius mind only to create Bitcoin. A peer-to-peer network where transactions can occur among friends and strangers. Transactions that are viewable but immutable by anyone present within the network

Wait! But how does one transfer currency here? Well, we have a different type of currency altogether. Gone are the days when you used Venmo or PayPal to pay your contact in € or ₹.

Thus, Web3 uses digital tokens as currency. These tokens are of a standard that represents a particular blockchain or organization.

Consequently, there are numerous coins from different blockchains, protocols, DEXs, DeFi organizations, DAOs, games, etc. And the total supply for each coin varies depending on the blockchain.

And again, where do you store these crypto coins? In a Web3 wallet that is compatible with the tokens and the standards, they are built in. 

Also read: Getting to Know Web3 Wallets

Simply put, Web3 wallets are specialized wallets in the decentralized space. These digital wallets store cryptocurrencies, NFTs, and stablecoins. Basically, all your Web3 assets.

However, they never work in an automated fashion and always require a party to sign when a transaction occurs. This ensures the security of the transaction, as the person who signs it is solely responsible for the transfer.

But, just imagine if they could work in an automated way — much like smart contracts in blockchain! Wouldn’t life be a little easier and nicer?

Account Abstraction and ERC 4337 

Account abstraction is a concept in decentralized finance (DeFi) and Web3 that allows users’ Web3 wallets to interact with smart contracts without needing to hold or manage the underlying cryptocurrency themselves.

With account abstraction, users can pay transaction fees in any cryptocurrency, rather than being limited to the specific token used by the smart contract. This means that users can participate in DeFi applications without needing to hold multiple cryptocurrencies or worry about gas fees.

Additionally, account abstraction allows for more complex transaction types, such as escrow or atomic swaps, to be executed on the blockchain with greater ease and efficiency. Account abstraction makes DeFi more accessible and efficient.

Moreover, account abstraction within smart contracts enables users to interact with decentralized applications without requiring the specific cryptocurrency the contract uses. It simplifies the transaction process by allowing users to pay fees in any cryptocurrency. 

Realtime Use Cases of Account Abstraction

Account abstraction is a great way to automate many DeFi processes from a wallet or an account. Some examples where account abstraction aids in real-time are:

Decentralized exchanges (DEXs):

Account abstraction enables users to trade tokens on DEXs without holding the specific cryptocurrency to pay transaction fees. With this feature, account abstraction makes it easier and more cost-effective for users to participate in trading activities.

Cross-chain atomic swaps:

Account abstraction facilitates cross-chain atomic swaps between different blockchain networks. With account abstraction, users can send and receive tokens on different blockchains without needing to hold multiple cryptocurrencies. Thus simplifying the transaction process and making it more accessible to a wider range of users.

Escrow services:

Account abstraction aids in creating decentralized escrow services where two parties can agree to a transaction and hold their tokens in a smart contract until certain conditions are met. With account abstraction, users can pay transaction fees in any cryptocurrency, making it easier and more cost-effective to use escrow services for various purposes, such as online marketplaces or dispute resolution.

Account Abstraction and Ethereum

Account abstraction makes Ethereum more flexible and scalable by reducing the need for users to hold multiple cryptocurrencies and simplifying the transaction process. By enabling users to pay transaction fees in any cryptocurrency, account abstraction makes it easier for users to interact with decentralized applications, including DeFi.

Further, this reduces the burden on the Ethereum network, leading to increased scalability. 

Additionally, account abstraction allows for more complex transaction types, like atomic swaps, which execute with greater efficiency and lower costs.

Overall, account abstraction enhances the flexibility and scalability of the Ethereum network, making it more accessible and usable for a range of users and use cases.

The ERC 4337

What started as an EIP 4337 [Ethereum Improvement Proposals], the ERC 4337 is an Ethereum Request for Comment #4337 that allows a wallet or an account to have account abstraction functionality without changes occurring at the consensus layer.

Deployed to the network on March 20, 2023, this standard helps automate certain transactions like smart contracts. The system contains an object called UserOperation that carries the details of the transaction and the required signatures.

Further, EIP 4337 is a proposal that’s ready to deploy because it doesn’t change the protocols at the consensus levels and only aids in better transactions.

Need for ERC 4337

We know that smart contract accounts only deploy as per predefined conditions within the network. As per Ethereum’s documentation, the need for EIP 4337 and ERC 4337 arose because, although smart contract accounts are available, one cannot operate the accounts like an EOA. 

Despite that, Ethereum believes that the ERC4337 standard will bring a lot more benefits to the blockchain than account abstraction. This would further ease its functions for users, validators, and nodes.

Further, ERC 4337, not only provides smart contract functionality to the contract but also bundles up transactions. Bundling transactions eases the hassle of multiple signatures for multiple transactions occurring from the same wallet.

Did anyone tell you about the recovery feature of crypto wallets yet? Because recovering seed phrases/ private keys just got easier. Well, that’s an account abstraction for you!

Benefits of ERC 4337

The ERC 4337 token from Ethereum came with a lot of benefits. The most benevolent benefits blockchain has are:

1. Account Abstraction: Give users access to a single account with the smart contract and EOA functionality. 

2. Decentralization: Enable participation from any purported bundlers. 

3. Consensus Changes: As the Ethereum consensus layer concentrates on scalability-oriented upgrades, avoid consensus changes to facilitate speedier adoption

4. Novel Use Cases: There are novel use cases such as aggregated signatures, daily transaction limits, account freezing in an emergency, whitelisting, and privacy-preserving software..

5. Savings: One can save on gas and time because bundlers can combine UserOperation objects into a single operation. 

Benefits of Account Abstraction

Account abstraction makes the Web3 smart contract account behave like an EOA. Some benefits of account abstraction are:

1. Better UX: Account holders can now go through a transaction process where they need not look into the nitty-gritty details of the transaction. It also makes it easier to interact with DApps and other Web3 protocols.

2. Complex Transactions: Account Abstraction enables complex transactions, such as sending money from escrow services. These transactions occur on the blockchain through smart contracts that contain the code to follow the instructions.

3. Network Load: By letting users pay transaction fees in almost any cryptocurrency, account abstraction reduces the network load multifold, especially on Ethereum.

4. Interoperability: Account abstraction allows for interoperability between blockchains and multiple Web3 accounts. The interoperable function makes it easier for users to shift between blockchains whenever they want to.

5. Enhances Security: Account abstraction enhances security by letting users send and receive tokens without exposing their private keys or requiring them to hold multiple cryptocurrencies.

The Safe Protocol

What is the Safe Protocol?

The Safe Wallet, by the Gnosis Chain, is a non-custodial wallet that runs on account abstraction. The smart contract-based digital wallet service comes from Gnosis Safe. This protocol came into existence to provide a safer, more secure, and easier way of transferring digital assets over Web3.

Further, this open-source project contains protocols, APIs, and SDKs for programmers to integrate the protocol into their applications. It’s quick, efficient, and, most of all, easy to work with while making your Web3 wallets secure.

So, why should you adopt the SAFE protocol? Because the features and advantages this protocol provides are like no other. Don’t believe it? Well, here’s a list of features and advantages one may have with the Safe protocol.

Features of the Safe Protocol

Some of the main features of the Safe Protocol are:

1. Easy On-Boarding: Using Web3 Auth to authenticate sign-in, the Safe protocol allows for an easy transition for users new and old to Web3.

2. Wallet-less Sign-in: Users can now sign in to their accounts without connecting to a wallet address. They can sign in with the sign-in account the user has.

3. Gas-less Transactions: Gelato provides users with gas-less transactions, i.e., although one may have to pay a fee, the gas fee would be much less than before.

4. Transaction fee Flexibility: Although one cannot escape the transaction fee, one can choose how to pay. One can either pay with the native token or the ERC-20 token. So, one needn’t worry if they are low on ETH.

5. Purchasing Power: The Safe Wallet Protocol allows one to purchase digital assets such as cryptocurrencies and NFTs using crypto coins or credit cards! [This feature is still being built with careful consideration and limitations on functionality.]

6. Self-custody: The wallet is yours to control. All the data and asset information present are not under the control of or visible to a third party.

7. Multisig Transactions: A wallet is in the control of multiple parties, i.e., a transaction cannot occur without the voting and approval of the majority of the co-owners. Thus providing a more secure wallet with multiple private keys.

8. Account Abstraction: One of the most amazing features that Safe Wallet offers is account abstraction. The safe wallet attains this feature by executing smart contracts with predefined conditions. 

Advantages of the Safe Protocol

The Safe Wallet by Gnosis is a non-custodial Ethereum wallet that offers several advantages, including:

1. Enhanced Security: The Safe Wallet incorporates multiple security features, including multi-signature functionality and hardware wallet integration, to ensure your funds are safe and secure.

2. Customizable Access Control: With the Safe Wallet, you can set up custom access controls, including multi-factor authentication and time-based restrictions, to ensure that only authorized parties can access your funds.

3. Easy Management of Multiple Assets: The Safe Wallet supports multiple assets, including ETH, ERC20 tokens, and NFTs, and offers an easy-to-use interface for managing your holdings.

4. Support for DeFi Applications: The Safe Wallet is integrated with popular DeFi applications such as Uniswap, Compound, and MakerDAO, making it easy to manage your investments and earn yield.

5. Open-source and Community-driven: The Safe Wallet utilizes open-source software. It is maintained by a community of developers and contributors, ensuring that it is constantly evolving and improving.

6. Multi-chain Functionality: The Safe wallet is compatible with most of Web3’s prominent blockchains, such as Polygon, Optimism, Aurora, Arbiutrum, Ethereum, and Gnosis (of course). One can use their wallet across different blockchains for various needs and have an easy time signing in and signing out.

Security of Wallets Within Safe

The security of the Safe Wallet comes from the multi-signature character it possesses. Having multiple parties take control of the transaction only means that the transaction has been approved and wasn’t faux.

Further, the essence of the multi-signature wallet’s security comes from each individual co-owning the wallet having different private keys. No one can validate a transaction using someone else’s private key. 

Consequently, the smart contract-based wallet protocol is crucial to secure the wallet. So, let’s see how digital agreements aid in wallet security.

How Safe Wallets Work

The Safe Wallet Protocol is a smart contract-based digital wallet system that utilizes multi-signature technology to provide enhanced security features. Here’s a simplified explanation of how it works:

Wallet Creation: To create a Safe wallet, a user sets up a smart contract on the Ethereum blockchain using the Safe Wallet Protocol. The user then defines a list of addresses that can control the wallet, including their own and those of any other individuals or entities they choose.

Multi-Signature Authorization: Transactions sent from the Safe wallet get executed if a specified number of authorized signatures are present.

For example, if the wallet is set up such that it requires two signatures to authorize a transaction, both of the authorized signers must provide their signatures for the transaction to execute.

Enhanced Security: The multisig feature within Safe tightens security for the digital assets present in a wallet. This helps protect against hacks, thefts, and other security risks when using a single-signature wallet.

User-Friendly Interface: In addition to its security features, the Safe Wallet Protocol also offers a user-friendly interface for managing wallets based on the protocol. The Gnosis Safe team provides a web-based interface that allows users to easily view transaction history, manage multiple wallets, and customize wallet settings.

Overall, the Safe Wallet Protocol provides a secure and user-friendly way to store and manage digital assets on the Ethereum blockchain. It offers enhanced security features, multi-signature authorization, and a user-friendly interface to make it accessible to users with varying levels of technical expertise.

Account Abstraction with Safe Protocol

The Safe Protocol attains account abstraction without ERC 4337. Additionally, the protocol allows for a Web3 wallet that can run from the command lines present within the smart contract.

Smart contracts are tailored in a way to suit the needs of traditional external accounts and can deploy the necessary transaction upon meeting the prerequisite conditions.

It allows for multiple transactions to occur at once while sending them across the block with a much lower gas fee.

Wallet Connect and Safe

What is Wallet Connect?

Wallet Connect is an application that facilitates connections between DApps and Web3 wallets.

Why is connecting wallets essential in Web3?

Well, everyone knows that to work in Web3 and use any application in Web3, one must connect their Web3 wallet to the particular DApp.

The Web3 wallets behave not only as a mode of “signing in” but also as an account or identity with a particular Web3 wallet address.

Consequently, it allows users to interact with multiple DApps and multiple blockchains. This then further allows them to interact with DApps and sign transactions without showing their private keys to DApps or other private servers.

Further, the protocol increases interoperability between different blockchains and different DApps at a multichain level.

A user can sign in to all the DApps with just one click! How? 

The Working of Wallet Connect

While the protocol uses a QR code to scan and sign in, it protects the integrity of the code through the presence of cryptographic key pairs. The cryptographic key pairs establish a secure connection between the user’s wallet and the Wallet Connect platform.

Features of Wallet Connect

Web3Modal: With Wallet Connect’s library, Web3Modal, one can easily operate with the multichain interface and manage all the wallet connections from a single view.

Sign: You can sign in once to all your wallets and ensure that all the transactions facilitated by the Wallet Connect platform are secure. Moreover, you need not face the risk of losing your private key to a third party.

Auth: All you need to do is sign in once, and you can access any part of Web3 because of interoperability between chains and networks. Your sign-in is safe. Also, you only need to either click or scan a QR code.

Push: Experience real-time Web3 with Push Notifications and don’t miss a thing. All blockchain activity, news, and updates come straight to your wallet. You can enable notifications and be constantly updated about the Web3 world.

Chat: Talk to your friends on the decentralized web with a private, Web3 wallet address-based chatroom. You can send texts, gifs, stickers, and crypto! Moreover, the ChatAPI works across platforms and chains, i.e., it can facilitate messages between any two WalletConnect users despite the current chain they are present in.

Advantages of Wallet Connect

Seamlessly login to Web3: Experience a one-click login to all of Web3 with Wallet Connect. Alternatively, scan your QR code and log in to all the DApps, DEXes, NFT Marketplaces, and any application on Web3.

Verification and Security:  Wallet Connect does not store your private keys. But it also does not share your private information and private keys with other blockchains or organizations. While taking such steps towards security, the transactions are verified many times to maintain integrity within the blockchain.

Multichain functionality: Want to use an ETH-specific DApp? Go ahead, feel free to change your DEX from Uniswap to BSC, or come over to Polygon’s testnet and test a few transactions.

because multichain operations just became hassle-free.

Web3 Interoperability: Apart from multichain operations, DApps and wallets across Web3 can interact together and provide the user with an amazing and seamless Web3 experience.

Wallet Connect and the Safe Wallet

Wallet Connect works with more than 50 wallets across Web3. These wallets are custodial, non-custodial, hybrid, smart contract, and NFT wallets.

Amongst the lot, one of them is the Safe Wallet from the Gnosis Chain. So, not only does WalletConnect support major networks like Ethereum, which holds many wallet projects, but it also supports good projects on a single chain. 

So, apart from all the benefits, Safe offers us while using Wallet Connect, it also helps with increased security for passcodes, private keys, sign-ins, and transactions.

Moreover, the gas fee or transaction fee becomes less while interoperability increases.

Summary

Account Abstraction is when a smart contract enables a Web3 wallet to behave like an EOA and perform multiple functions. Although many smart contract wallets are available, the ERC 4337 provides more than just account abstraction to the network.

Further, the Safe Protocol by the Gnosis Chain has protocols, APIs, and SDKs that aid in account abstraction of the Safe Wallet.

To top that off, WalletConnect provides a secure and easy way of connecting to multiple DApps with one common sign-in feature for all wallet accounts.

The post Account Abstraction with Safe Protocol appeared first on ChainElevate.

In this blog, we’ll recap what Web3 and Web 3.0 are. And later, see how blockchain technology helps the metaverse become a decentralized version of a virtual universe. We’ll also explore the challenges blockchain technology might face in implementing its protocols in artificial reality.

Okay, so before we head to the break of Web3 and Web 3.0, I need you to realize that the previous iterations of the world wide web are pretty much the same.

Web 1.0 was a read-only web, which evolved into a read-and-write web — Web 2.0. The additional features in Web 2.0 were the secure login from the central ID and making it more interactive.

On Web3

Web3 is a decentralized version of cyberspace. A rendition where a digital (virtual) ledger stores all information passed, messages relayed, and details of payments.

Further, the information in each block is secure with encryption. A private key helps one decrypt the message inside the block. 

Consequently, the public key behaves as the identity of the wallet address. The encryption makes sure that the information is safe inside the ledger.

Furthermore, multiple computers verify the transactions and carry out the role of miners or validators. These validating checkpoints are often known as “nodes.”

Some of the features of Web3 are decentralization, transparency, security, collaboration, permissionless-ness, and trustlessness.

On Web 3.0

The Semantic Web experience starts with a version of the Internet comprising features such as machine learning, artificial intelligence, and the Internet of Things.

Further, Web 3.0 easily integrates with the current version. Data collection through third-party servers, personalized content, efficient search data based on your preferences, and data interoperability across platforms and devices are all part of the Semantic Web experience.

On Blockchain and Metaverse

Blockchain is a tool for the third iteration of the World Wide Web. The goal of this version of cyberspace is decentralization.

The meta-universe, on the other hand, is an extension of the IoT. It provides a space for humans to escape reality and immerse themselves in an XR [X = virtual, augmented, generally, extended reality].

Blockchain + Metaverse = A WONDERFUL EXPERIENCE

We’re now aware of Web3 and Web 3.0. This section explores the possibilities of how Web3 and Web 3.0 can come together to make XR an amazing decentralized reality.

In addition to the advantages that DLT brings, blockchain technology has a revolutionary potential to create and interact with XR.

Blockchain technology can revolutionize the metaverse experience by providing several key benefits that can help make the metaverse platform better. Some ways are:

Decentralization

A blockchain-based metaverse can be decentralized, meaning that the power and control of the platform are distributed among its users rather than being centralized in the hands of a few individuals or organizations. Decentralization can help create a more democratic and fair metaverse, where users have a say in the platform’s development and management.

Security

Blockchain technology provides a high level of security, making it possible to create a secure and trusted metaverse that protects users’ data and assets. Through encryption and other security measures, blockchain-based metaverse platforms can ensure that users’ information is private and that secure transactions occur.

Interoperability

Blockchain technology can enable interoperability between different metaverse platforms, allowing users to move seamlessly between different virtual worlds and transfer assets and data across platforms. Interoperability can create a more interconnected and vibrant metaverse ecosystem.

Digital Ownership

A blockchain-based metaverse enables users to own and control their digital assets and data and lets them buy, sell, trade, and transfer virtual assets like NFTs and cryptocurrencies. Thus creating a new economy within the metaverse, where users can earn real-world value from their virtual assets.

Transparency

Imagine a metaverse with the features of a blockchain. A virtual land where data is transparent yet secure, actions are accountable, and everyone participates in decision-making.

By employing smart contracts and other tools, developers can create a transparent and auditable system for managing the interactive platform.

But… Blockchain and Metaverse Needs to Solve a Few Issues First.

Sure, we can have a blockchain-based metaverse. You can try some of the blockchain-based metaverses such as The Sandbox, Decentraland, Enjin Coin, and much more. But wait for Q4 of 2023, when you can explore Shiba Inu’s metaverse platform too!

However, before we create and build an entire virtual universe on a blockchain (layer), we must first realize that creating a metaverse that runs on a blockchain is a complex task. The task presents several challenges and problems. Some of the major problems are:

Scalability

One of the biggest challenges in building a blockchain-based metaverse is scalability. The number of transactions and data stored in a blockchain can be overwhelming, leading to slow processing times and high fees. Developers will need to find solutions to increase the scalability of their blockchain platform to accommodate a large number of users.

Potential Solutions

Sharding: Developers can use sharding to break up the blockchain into smaller, more manageable parts that can process transactions independently, which can significantly increase the network’s capacity to handle a large number of transactions.

Layer-2 scaling solutions: Developers can use layer-2 scaling solutions such as side chains or state channels to process transactions off the main blockchain, reducing the computational requirements of the network.

Upgrade the consensus mechanism: Developers can explore alternative consensus mechanisms that prioritize scalability, such as proof-of-stake (PoS), which requires less computational power to validate transactions than proof-of-work (PoW) mechanisms.

Interoperability

Different blockchain networks may have different technical specifications, which can create interoperability issues when connecting different parts of the metaverse. Developers must ensure that the various components of the metaverse can communicate with each other seamlessly, regardless of the underlying blockchain technology.

Potential Solutions

Develop common standards: Developers can work together to develop common standards for blockchain interoperability. Standards ensuring that different blockchain networks can communicate seamlessly.

Cross-chain bridges: Developers can use cross-chain bridges to connect different blockchain networks and facilitate the transfer of assets and data between them.

Middleware: Developers can use middleware solutions that act as intermediaries between different blockchain networks to facilitate communication and interoperability.

Security

A secure blockchain-based virtual space would prevent hacks and other security breaches that could cause significant damage. Developers must implement robust safety measures to ensure users’ data and assets are safe from cyberattacks.

Potential Solutions

Encryption: Developers can use encryption to protect users’ data and assets from cyberattacks.

Multi-factor authentication: Developers can implement multi-factor authentication to provide an additional layer of security for user accounts.

Conduct regular security audits: Developers can conduct regular security audits to identify and address vulnerabilities in the platform.

User Adoption

One of the biggest challenges for a new metaverse is attracting users to the platform. Developers need to create a platform that is user-friendly and offers compelling features to encourage users to join and stay.

Potential Solutions

Focus on user experience: Developers can focus on creating a user-friendly platform that is easy to navigate and offers compelling features that appeal to users.

Offer incentives: Developers can offer incentives such as rewards or bonuses to encourage users to join and stay on the platform.

Leverage social media: Developers can leverage social media to promote the platform and attract new users.

Decentralization

A decentralized metaverse would mean that users get to control the platform with equal power vested in everyone. Decentralization demotes centralization and promotes openness, transparency, and democracy.

Potential Solutions

Decentralized governance: Developers can implement decentralized governance mechanisms that give users a say in how the platform develops and operates.

Scattered storage: Developers can use decentralized storage solutions to ensure that data is stored in a decentralized manner, reducing the risk of data breaches.

Individual identity: Developers can use individual identity solutions to ensure that the user controls their identity. This provides them with ownership and responsibility.

Summary

In summation, Web3 and Web 3.0 are very different concepts that aim to make the internet a better place. While Web3 deals with a decentralized version of the internet with smart contracts, nodes, staking rewards, and DeFi, Web 3.0 deals with XR, IoT, machine learning, and artificial intelligence.

Further, it is possible to have a metaverse built on top of a blockchain to experience a decentralized environment. A metaverse that is transparent, stores information, messages, and payment details in blocks, and provides security through encryption, is a wonderful concept.

But Web3 will have to pull through some problems about Scalability, Interoperability, Security, User Adoption, and Decentralization. When the right steps are taken to sort out the issues, a developer can seamlessly create a world of their own on a blockchain.

The post Merits of Blockchain and Blockchain’s Challenges With Metaverse appeared first on ChainElevate.

A Merkle Tree is a data structure used in blockchain technology to verify the integrity of large data sets efficiently.

In a Merkle Tree, data is organized into a tree structure. Here, each leaf node represents a specific piece of data (such as a transaction in a blockchain). Each node in the tree, except for the leaves, is the hash of its two child nodes.

The root of the tree, also known as the Merkle root, is the hash of the top two nodes in the tree, which in turn are the hashes of their child nodes. This process continues until only a single hash value, the Merkle root, remains.

Why is it called the Merkle tree? Merkle/Hash trees get their name from Ralph Merkle, who registered the idea in 1979.

Role of a Merkle Tree in Blockchain Technology

Merkle Trees in blockchain technology efficiently verify a particular transaction or block. If the transaction is part of a block, it verifies the transaction without verifying the entire set. The verification occurs by providing a compact proof consisting of a set of hashes along the path from the transaction to the Merkle root.

Further, Merkle trees have applications as a data structure for data attestation and synchronization. In addition, Merkle trees also strengthen security by encrypting blockchain data.

Features of a Merkle Tree

A cryptography data model is a Merkle tree. Yet, the hash list is an extension of this hash-based dataset. Each leaf node is a hash of a data block, and each non-leaf node is a hash of the offspring of that leaf node. Merkle trees often have a branching factor of two, implying that each leaf node could possess up to two little leaves.

Some other features of a Merkle tree are as follows:

• A binary tree structure where each non-leaf node is a hash of its child nodes.
• Leaf nodes represent small pieces of data, such as transactions in a blockchain network.
• Verifies huge amounts of data efficiently.
• Allows nodes to verify the data without downloading the entire block.
• Ensures data integrity and security through cryptographic hashing
• Can detect any modification or tampering of the data.
• Enables Merkle proofs, a method of proving data membership in the tree without revealing the data itself.
• Employed in various applications beyond blockchain technology, such as distributed file systems and network security.

Verification by a Merkle Tree in Blockchain Technology

A Merkle tree accumulates all transactions in a ledger and creates a digital fingerprint of the complete set of operations, letting the user verify whether it contains a transaction in the block.

Additionally, the Merkle tree in the digital ledger technology accurately checks the transactions by hashing data in pairs repeatedly until only a single root hash remains. This allows nodes to assess the data without downloading the entire data on the block, ensuring data integrity and security through cryptographic hashing.

Considering a Merkle Tree is a USPTO-patentable algorithm and data structure, you cannot use it economically unless you obtain Ralph Merkle’s consent or pay him a royalty.

Advantages of a Merkle Tree in Blockchain Technology

Here are five advantages of Merkle Trees in the blockchain:

1. Efficient verification: Merkle Trees enable efficient and quick confirmation of data integrity without downloading the entire dataset. The Merkle root provides a compact summary of the complete dataset, making it faster and more efficient to verify.

2. Security: Since Merkle Trees rely on cryptographic hash functions, it gets challenging to tamper the data in the tree. One cannot tamper with the information without being detected. Any changes to the data will result in a different hash value, and the Merkle root will no longer match.

3. Scalability: Merkle Trees can handle large amounts of data and provide efficient verification. Thus making them ideal for use in large-scale blockchain networks where data integrity is crucial.

4. Simplified data handling: By organizing data into a tree structure, Merkle Trees simplify the handling of large amounts of data. This can reduce the complexity of managing blockchain transactions and ease data input into the digital ledger.

5. Reduced storage requirements: Merkle Trees can reduce the storage requirements for large data sets. Rather than storing every transaction or block in the chain, the Merkle root provides a compact summary of the entire dataset, which can significantly reduce the amount of storage required.

Uses of a Merkle Tree

Merkle trees have several uses in various fields, including:

1. Blockchain Technology: Merkle trees are extensively used in blockchain technology to verify the integrity of transaction data. In blockchain networks like Bitcoin and Ethereum, Merkle trees help construct the block header, which contains a summary of all the transactions on the block. Thus allowing nodes to efficiently verify the data without downloading the entire ledger.

2. Data Structures: Merkle trees get employed in various data structures like hash tables, distributed file systems, and version control systems. In distributed file systems like InterPlanetary File System (IPFS), Merkle trees represent the content-addressed file system, where the cryptographic hash is unique to every file.

3. Cryptography: Many cryptographic applications use Merkle trees for key management, digital signatures, and identity management. For example, in a Merkle signature scheme, a Merkle tree is used to construct a signature for a big data set, where verification needs only a small subset of the information.

4. Network Security: Merkle trees strengthen network security. They help to detect any data tampering or alteration. For example, in Secure DNS (Domain Name System), a Merkle tree is used to ensure the authenticity and integrity of the DNS records.

5. Gaming: Merkle trees can be used in gaming applications to prove the fairness and randomness of the game. In a provably fair game, a Merkle tree shows how the outcome of the game is random and the game is not rigged.

Overall, Merkle trees are a versatile and widely used data structure that provides efficient and secure ways to handle big information files.

Summary

A Merkle Tree is a tree of cryptographic hashes that helps to verify the sequence of the transactions (and the transactions themselves) within the block.

Further, the name comes from the inventor, Ralph Merkle, and plays an integral part in Blockchain Technology. Merkle Trees ensure security, ease verification of transactions, simplify data handling and reduce storage requirements. Eventually, the branch of hashes ensure the block tags the verified chain of block ledgers in the network.

Hashes are a type of encryption. Want to know more on Hashing? Check out our blog on Types of Encryption in Blockchain Technology.

The post What Is A Merkle Tree in Blockchain Technology? appeared first on ChainElevate.

Functioning of Web3 Wallet

Web3 Wallet Creation

The first step is to create a Web3 wallet, which can be done through various providers such as Metamask, MyEtherWallet, Trust Wallet, and others. During this process, the user will create a unique username and password and sometimes, a recovery key or seed phrase for backup purposes.

Web3 Wallet Accession

Once the user has created their Web3 wallet, they can access it through a browser extension or mobile app. The Web3 wallet will connect to the blockchain network, such as Ethereum or Binance Smart Chain, and display the user’s balance of digital assets.

Digital Asset Transactions

The user can send and receive digital assets, such as Bitcoin or Ethereum, directly from their Web3 wallet. To send digital assets, the user will need to input the recipient’s address and the number of assets to be sent. To receive digital assets, the user will need to provide their wallet address to the sender.

dApp Interaction

Web3 wallets allow users to interact with dApps on the blockchain network. When a user accesses a dApp, the Web3 wallet will prompt the user to connect their wallet to the dApp. This connection allows the user to make payments on the dApp, such as buying and selling digital assets or participating in decentralized finance (DeFi) activities.

Signing Transactions

When a Web3 transaction occurs, the user signs the transaction with their private key upon a prompt. This signature verifies the transaction and authenticity to prevent unauthorized access to the assets or commit fraud.

Managing Digital Assets

Web3 wallets can manage many digital assets, such as cryptocurrencies, non-fungible tokens (NFTs), and other digital assets. Users can view their balances and transaction history for each value within the Web3 wallet.

Maintaining Security

Web3 wallets are designed to maintain security and prevent unauthorized access to the user’s digital assets. To maintain security, users should keep their private keys and recovery phrases safe and secure and never share them with anyone.

Eventually, Web3 wallets provide users with a secure and convenient way to manage their digital assets and interact with decentralized applications on blockchain networks. By connecting to the blockchain network and using private keys to sign transactions, Web3 wallets allow users to send and receive digital assets, participate in decentralized finance activities, and manage multiple digital assets from a single platform.

Web3 Wallet Authentication

Authentication is an essential part of using decentralized wallets, as Web3 wallets store digital assets and interact with decentralized applications (dApps). To prevent unauthorized access and protect user funds, authentication is crucial. Web3 wallets use a combination of public and private key cryptography to authenticate users and authorize transactions.

Further, when a user creates a Web3 wallet, a public key and a private key are generated, which are used to identify the user’s wallet and sign transactions, respectively. Web3 wallets prompt users to input their private key or sign a transaction using their private key to verify them.

Following, the signature is verified by the network ensuring that the payment is genuine and authorized by the user. Moreover, these wallets also offer additional security features such as two-factor authentication (2FA) and biometric authentication (e.g., fingerprint or face recognition) to provide further protection to user accounts from unauthorized access.

Consequently, a Web3 wallet authentication occurs by simply signing in by connecting the wallet to the dApp. This doubles as an identity for the user in the DLT universe, thus providing a seamless experience.

Uses of Web3 Wallets

Alternatively known as decentralized wallets, Web3 wallets interact with decentralized applications (dApps) on blockchain networks such as Ethereum, Binance Smart Chain, and others. Some other examples of the uses of Web3 wallets are:

Storing Cryptocurrencies: The primary use case of a Web3 wallet is to store cryptocurrencies, such as Bitcoin, Ethereum, and other digital assets. These wallets allow users to manage their digital assets directly, without a central authority or intermediary.

dApp Interaction: Web3 wallets allow users to interact with dApps on blockchain networks. Users can sign transactions verify their identity, and make payments using their Web3 wallet.

Blockchain Governance: Web3 wallets allow users to participate in blockchain governance by voting on proposals, making suggestions, and contributing to the expansion of decentralized networks.

Trading Cryptocurrencies: Web3 wallets are useful for trading cryptocurrencies directly on decentralized exchanges (DEXs) such as Uniswap and PancakeSwap. These DEXs allow users to trade cryptocurrencies without a centralized exchange.

NFT Transactions: Web3 wallets can be used for buying, selling, and storing non-fungible tokens (NFTs), unique digital assets in the Web3 ecosystem.

Overall, Web3 wallets provide users with greater control, privacy, and security over their digital assets and transactions on blockchain networks.

Summary

The functioning of a Web3 wallet starts with its creation and address generation. One can access the digital wallet from browser extensions or mobile applications. Further, these digital wallets sign transactions and ensure secure payment. 

Moreover, Web3 wallets provide an identity, to store NFTs and other cryptocurrencies. It can also help in trading your crypto assets, help with blockchain governance, and help you interact with DApps.

If you’re ready to start using your Web3 wallet beware to choose from the top Web3 wallets for 2023 and set afoot in the world of Web3!

The post Functioning and Uses of Web3 Wallets appeared first on ChainElevate.