Number of transaction per second issues!
By decentralised nature of blockchain networks, each node of the network processes and carries a copy of every transaction in the network. Even though it is true this will increase the security and transparency, the number of transaction is limited by what a single node is capable of. With each additional node, the internode latency is decreased logarithmically which makes the network weaker with addition of nodes.
In a centralised system, scaling can be accomplished simply by adding more servers. When each transaction is processed by each node in decentralised network, updation should be done in every node for scaling.
So the choice will be between centralisation and poor transaction as the size of the network increases. Unless there is a better way to enable better transactions with scaling.
Long story short:We can’t wait about an hour to pay in a fast food joint.
That's the story behind the ever increasing energy requirement too!
For our transaction to happen with limited number of transaction per second, it will happen on a first come first serve basis. So we won't have a happy time waiting if the blockchain won't solve this transaction per second issue
Well if the transactions are prioritised according to the cash involve in the respective transaction, it makes the purpose of the revolution invalid- To fight against and reduce transaction fee!. Even if we use third party applications it will fail the purpose because why not just use the banks instead!!
In bitcoin transaction, the digital signature which is only used at the end of the transaction occupies about 70 percent of transaction detail which can cause inefficiency. The Segregated Witness (Segwit) is used to separate this signatures from the other transaction details and added at the end when it is required.
The segwit can increase the transactions by about 70 percent
The bitcoin community was split when a fraction supported increasing the block size to 2MB and the other fraction supported segwit
LIGHTING NETWORK - This can solve the aforementioned problem by enabling big chunks of transactions. The transactions will be performed at higher speeds and lower expenses with the lightning network
Lighting network can revolutionise peer to peer transactions.
It uses a parallel offline channel which can be updated later on eliminating the need of 3rd party system like banks. Payments can be processed instantaneously since everything happens in the offline channel and no extra is spend for verification by the network.
Lightning network is the solution for scaling problem
Sharding
Another solution is Sharding, in which the entire blockchain is split into shards and each node will be handling a shard. The transactions may not require all shards for processing so only the required nodes will be activated for processing the transaction. In sharding, there should be a mechanism to pass message between the shards
Even Though blockchain reduces the transaction cost by great magnitude. The initial setup capital is quite high.
The processing requirement is very high compared to centralised system but considering the full picture it is indeed worth it
The government regulations should be solid to avoid any disputes, since earlier governments create and maintain the fiat currency.
Proof of stake can be used to snable scalability!
In Proof of stake, a security deposit has to be submitted before validating blocks. The money is lost, if it’s betted against the consensus and it is returned along with the transaction fee if the bet supports the consensus
How PoS(proof of stake) can reduce energy consumption?
In proof of work new coins are generated when the blocks are validated whereas the validators gain transaction fee in Proof of Stake. The block size can also be varied using the server handling capacity of each node, so that the requirement of every node to perform equally is avoided
Optimistically with all these multiple methods and options, the scaling issues can be solved
The protagonist called FUD
Fear, Uncertainty and Doubt can certainly decelerate the adoption of blockchain amongst all the technical problems. Of which the major concern is security that this new technology can provide
Do you think we weren’t skeptical about security issues even before the idea of blockchain came up?
The solution is minimization of risk, it always had been and it always will be.