Bitcoin was introduced in 2009, the revolutionary concept of the chain of blocks, a system registry distributed which allows you to store and update databases of transactional data in a decentralized manner. But with the success of the blockchain appeared its weaknesses and limitations. Hence, the emergence of crypto-currencies developed around an innovative concept : the directed graph acyclic.
The weaknesses of the chain of blocks
Without going into details too technical, the linear architecture of the chain of blocks means that it presents problems of ” scalability “, or in French to use on a larger scale. The number of transactions that can be processed is limited by the size of the blocks and the speed at which these are processed. Bitcoin is able to manage approximately 3 transactions per second maximum. The forks as Bitcoin Cash have increased the block size (1 MB for BTC to 8 MB for BCC) to allow the processing of more transactions. But this measure does not solve the basic problem of scalability, in particular in the case of adoption of a crypto-currency as a means of payment of daily life similar to credit cards, or for supporting the development of the Internet of things (IOT).
A solution ? The directed graph acyclic (DAG)
This is why some developers specialize in the chain of blocks are set to explore new concepts. In particular, the directed graph acyclic, which is used by the Tangle of IOTA, RaiBlocks, Byteball and many other small news that are beginning to see the light of day, as the IoT Chain.
With a DAG, the transaction must not be processed in blocks, in a linear fashion. The transactions create a mesh d-pad in ” clinging to each other “. With this concept, the validation is not done by the miners, but by the transactions themselves : they validate each other. This presupposes that the processing time much shorter and a scalability almost infinite. This concept can be viewed via this site : http://tangle.glumb.de/.
The Tangle of IOTA – Source iota.org
The rise of crypto-currencies to DAG
During the month of December, IOTA is passed on to the front of the stage, being propelled in the top 5 in the ranking of the market values of crypto-currencies. To fold up after that, but become a permanent member of the top 10. Thanks to the success of IOTA, which has attracted the interest of many large companies such as Bosch and Fujitsu, other currencies graph, directed acyclic have experienced a meteoric rise. This is particularly the case of RaiBlocks, whose market value has risen to more than $ 4.5 billion before the crash of the market in January. Byteball also takes advantage of the rise in power of the currencies of the DAG, as well as one of the last who came, IoT Chain.
The concrete benefits of these crypto-currency 2.0
This unique architecture has many advantages :
- Scalability theoretically infinite
- Transaction costs, zero (IOTA) or infinitesimal
- Speed (a few seconds maximum)
- Not mine (crypto-currency that is respectful of the environment)
- No adjustment of the difficulty
Supporters of the chain of blocks criticize nevertheless to these crypto-currencies will not be decentralized. For me, this is a false problem, because the currencies theoretically decentralized, the are, de facto, due to the monopoly position held by the miners to the most powerful. Personally, I prefer to know clearly who is the authority behind a crypto-currency and what its aims are, rather than depend on minors. Efficiency is paramount also. It’s been moons that I have not bought BTC, because I don’t want to pay 50 dollars to send. But this engages only me…
The prospects opened up by the directed graph acyclic
With such a concept, we can really aim for democratization of crypto-currencies on the market of means of payment. If IOTA keeps all its promises (because at the moment the project is still in beta), we will be able to take advantage of transactions are immediate, and free, in which the processing speed does not depend on the activity on the network. But the goal is mainly to open up new markets, in particular that of the Internet of things (Iot). A market that should be one of the major themes of the stage FinTech in the years to come.
The technology of the chain of blocks decentralized type PoW is it threatened ?
If it fails to put in place solutions Lightning Network, clearly. It is slow and very expensive. For Bitcoin, the idea seems to have been abandoned, BTC light, apparently, his future as a store of value. Increase the size of the blocks, as Bitcoin Cash, is only a short-term solution. On the side of Ethereum, there are related projects such as Raiden Network that seek to address these issues, brought to light by innocent kittens virtual. Other cryptos, such as Stellar and Ripple, already provide a proven solution that allows you to execute a transaction in a few seconds to a fee amounting to a few cents. The threat is very real in the absence of new developments.