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Global companies are implementing distributed ledger technologies in an effort to become more efficient in areas such as global payments and supply chain transparency. Blockchain technology can replace slow paper-based processes and improve security.

However, many of the platforms in use today are badly designed. Networks get clogged with traffic too easily, resulting in latency issues and ultimately a poor user experience.

According to a 2019 McKinsey report, there are now more than 20 billion connected devices in the world, all of which “require management, storage and retrieval of data.” However, the blockchain design is ill-equipped to handle this immense wave of data, which puts pressure on networks to maintain high speed and sufficient storage capacity.

Making blockchains more sustainable

Transaction speed is important for blockchain adoption and sustainability. However, there is a tradeoff between performance.

There are several factors that can delay confirmation, but an overloaded network is a major cause. When many users send transactions, there are longer queues for nodes to validate them. That’s because miners or validators who operate a network perform their validation based on a public shared ledger. While this process reduces risk, it can also sacrifice transaction speed, especially when there is a lot of traffic.

Developers are also struggling with how to store blocks permanently in the chain. A massive increase in storage requirements can cause a network to become slow and unstable. A protocol needs participant nodes to be able to send and download the chain within a short time.

The blockchain trilemma is a technical challenge between scalability, decentralization and security. Developers can achieve two of these factors, but have to sacrifice the third.

Immediate confirmations become a critical factor for adoption as decentralized innovations compete with traditional solutions in the marketplace. In financial services, for example, there is a compelling demand for high-throughput, low-latency networks that can potentially match the capacity of the Visa and MasterCard networks, which process tens of thousands of transactions per second.

In line with the expectations of users

Over the past year, we’ve seen several developments that bring near-instant confirmations closer to reality. Protocol-level enhancements such as signature aggregation and block proposal pipelining are two examples.

Signature aggregation allows validators with multiple Boneh-Lynn-Shacham cryptographic keys to merge all signatures into one concatenated signature and send them as one peer-to-peer message. With block proposal pipelining, a validator starts proposing a new block immediately after collecting two-thirds of the signatures. It means that a new block proposal process and the collection of the last one third of the signatures take place simultaneously.

The net result of these improvements is a remarkable shortening of the block end date to just one or two seconds in a live mainnet environment. Two second finality is a disruptive, almost instantaneous function within the digital assets industry as Bitcoin (BTC) and Ether (ETH) take minutes to confirm at a higher cost. To put things in perspective, it’s the kind of speed that would meet the expectations of regular users who swipe plastic cards at a supermarket.

Another solution being attempted by various blockchain projects is called sharding. The sharding method divides a database into smaller chunks so that nodes can process transactions faster and update a shared ledger in real time.

Sharding is widely recognized as the best solution to achieve blockchain scalability as it increases the number of transactions per second and requires less storage space for nodes. Sharding solves blockchain bloat without sacrificing too much on decentralization and security. Bloat refers to the challenge of finding enough storage space for a huge amount of collected data.

Other solutions are also being explored, although they have yet to be realized on a mainnet. Danish researchers have suggested a solution with a separate validation layer to achieve a finality that is partially synchronous with a standard block validation process. However, this has not yet been proven to be effective on a live mainnet.

The need is there. Fast finality opens up opportunities for DApp developers to build the fastest and most useful applications for true adoption. For example Brian Brooks, recently acting head of the Office for the Comptroller of the Currency wrote in the Financial Times of a vision for ‘self-driving banks’.

Resolve the trilemma

Reducing block time cannot and should not come at the expense of blockchain security. Resolving the trilemma means ensuring that network decentralization remains a priority. The solutions outlined here show that it is possible for a blockchain project to achieve decentralization, security and lightning-fast confirmations.

With decentralized applications, a fast and responsive experience leads to high user satisfaction and retention. Waiting tens or even minutes to confirm a transaction is the last thing we want for mass adoption of Web 3.0 applications.

As the technology is widely adopted worldwide, shared ledgers should provide compelling use cases, improve key performance indicators and increase return on investment.

This article does not contain investment advice or recommendations. Every investment and trade move carries risks, and readers should do their own research when making a decision.

The views, thoughts and opinions expressed here are the sole ones of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Stephen Tse is the founder and CEO of Previously, he was a researcher at Microsoft Research, senior infrastructure engineer at Google, and chief search ranking engineer at Apple.