Scaling NEO’s Smart Economy

By | January 12, 2018

Scaling NEO’s Smart Economy

One of the key differences between NEO and other Blockchains is its mission to create its revolutionary Smart Economy, but to accomplish that mission, the Neo blockchain needs scalability to meet its users’ needs. Trinity has been created to give NEO all the scalability it needs.

One of the key factors that will place NEO under strain is its rapid adoption by developers, because, on NEO, they can develop dApps and smart contracts without the need for Solidity, which is a programming language on the Ethereum blockchain that few people know. Instead, developers can utilize C#, JavaScript, and other more commonly known programming languages via the NeoContract smart contract system.

Another major factor that will increase the load on the NEO blockchain is the ability to digitize any physical asset, which can then be stored or traded. By utilizing X.509 digital identity standards, NEO’s technology allows for a fully decentralized, highly transparent, trusted, and intermediary free economy.

There are other considerations, but these two factors alone could easily drive enough traffic to the NEO blockchain to slow it down if every single transaction or smart contract is deployed on-chain.

Seeing this issue, Trinity has developed a network, like Ethereum’s Raiden or Bitcoin’s Lightning Network, to address future scalability issues.

Not every transaction needs to happen on-chain. In fact, one of Bitcoin’s founding concepts was P2P technology. It only makes sense to make full use of P2P to address scalability.

Enter state channel technology.

A state channel is a direct interaction between two or more users. For example, Bob wants to send 1 NEO each to Rita and Sue. The condition is that Bob gets his NEO back at a predetermined time in the future. However, in the meantime, Rita decides she wants to send her NEO to Sue. At the predetermined time, Bob receives his 2 NEO back from Sue.

Such agreements and transactions take place privately, off-chain. The only information that goes on-chain is the final state of the signed agreement or smart contract. So, all the private transactions between Rita, Sue, and Bob would count as a single transaction on-chain. In this case, Bob got his NEO back. However, if there had been a dispute, the full transactional history could be uploaded to the blockchain for verification.

Admittedly, the above example is somewhat simplified, but the process, no matter how complex the series of transactions, is the same.

Currently, the Raiden Network claims to increase Ethereum’s transaction per second (Tx/sec) speed from 10 to 1,000,000. Since Trinity and Raiden use similar scaling technology, it’s safe to assume that Trinity is capable of increasing NEO’s speed from an unoptimized 1,000 Tx/sec to around 100,000,000 Tx/sec, which is more than capable of meeting the needs of a Smart Economy now and well into the future.

Published at Fri, 12 Jan 2018 17:12:02 -0500