When IBM was founded in 1911, the idea of a portable computer or a home PC was still far from being conceived. At the same time, computers of that era were giant mainframes, expensive and accessible only to large companies and government organizations. In 1943, IBM’s president, Mr. Watson, stated: “I think there is a world market for maybe five computers”. This prediction proved to be one of the worst in history, considering that today there are billions of devices capable of connecting to the internet and processing massive amounts of data.
Blockchains have undergone an evolution similar to that of computers. Initially, with Bitcoin and Ethereum, first and second-generation blockchains, we were faced with a centralized system where everyone shared the same computing resources and where vertical scalability was limited, while horizontal scalability was impossible. But just as computers saw the emergence of smaller and more powerful devices, Bitcoin and Ethereum have seen the arrival of third-generation blockchain.
Vertical scalability in the third-generation blockchain mainly concerns the creation of mechanisms to improve the speed and efficiency of transactions. This can be done through the use of new consensus mechanisms, such as the Proof of Stake (PoS) protocol, which can reach thousands of transactions per second. However, the limiting factor here lies in the application itself.
Horizontal scalability, on the other hand, involves the creation of a network, where each blockchain acts as an autonomous server and interacts with other blockchains. In this way, blockchains can theoretically be infinitely scalable. To do this, multi-chain architectures are used, where multiple parallel chains run the same application and are managed by a common set of validators.
To make a comparison with computers, first and second-generation blockchains are like old mainframes, while third-generation blockchains behave like highly scalable networks of modern connected servers. In short, the future of blockchains will depend on their ability to evolve and adopt new mechanisms of horizontal and vertical scalability, which allow creating an internet of blockchains.
In conclusion, blockchain is rapidly becoming an essential element in digital transformation, but to realize its full potential, scalability issues need to be addressed. Companies adopting blockchain must take these challenges into account and seek solutions that allow them to scale their blockchain infrastructure effectively and reliably. In this way, blockchain technology can continue to play an increasingly important role in the digital transformation process and in digital innovation.
Scalability can be a critical factor for the spread of blockchain technology. Only a highly scalable blockchain can handle the massive volume of transactions required by different sectors and applications. But thanks to the evolution of third-generation blockchains, scalability is no longer an obstacle, but a challenge that can be won.
Blockchain brings great innovation to many sectors and is definitely worthy of being considered as the solution to various digital transformation challenges. Let’s not be fooled by the image of blockchain as something exclusively related to cryptocurrencies. Blockchain positively revolutionizes many aspects of our life and work.
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