The Sign of the Four: A Classic Tale
In December 1878, a British woman named Mary receives a telegraph from her father, who is returning from India. When she arrives at the hotel to meet him, he is gone. A few days later, her father’s only friend dies, and Mary finds a map of a fortress in her father’s desk that states the names of four people.
This is the beginning of The Sign of the Four, the second novel of The Sherlock Holmes Series by Sir Arthur Conan Doyle. Famous for its complexity, the story revolves around a promise: four people discover a treasure and vow to split it up. To ensure no one takes the entire treasure for themselves, they create a map and sign it together.
Blockchain: A Modern Parallel
This scenario is a metaphor for blockchain technology. In blockchain, everyone signs the ledger, everyone makes a copy of it, and everyone keeps it. This ensures that the ledger’s contents cannot be forged, allowing people without mutual trust to engage in transactions without needing a third party to guarantee execution.
The Limits of Blockchain
However, blockchain has a significant limitation: it’s slow. Every time you sign the ledger, you must copy it and send it to every person involved, one-by-one. Although this is done online, it remains slow. This is why conventional transactions take minutes to be confirmed, as they form “blocks” of data one by one.
Transaction speed is measured in terms of “Transactions Per Second” (TPS). Bitcoin, which on average takes 10 minutes to mine and append a block of transactions to the ledger, is roughly estimated to execute 7 TPS. Ethereum is slightly better at 20 TPS. By comparison, VISA processes thousands of highly complex transactions per second. The ledger must confirm transactions significantly faster to be used like a VISA credit card at scale. According to VISA’s homepage, VisaNet can authorize up to 65,000 transaction messages per second. Clearly, blockchain technology has a long way to go to match other payment methods.
This issue is closely linked to scalability, which refers to the ability to process a large number of TPS across many network participants. When many transactions are submitted to the network, confirmation times can increase, and network fees can rise. For example, CryptoKitties, a popular application running on the Ethereum network, accounted for 10% of all transactions confirmed by the blockchain in early December 2017, thereby slowing down the entire network and increasing fees for all transactions.
FANTOM’s Proposed Solution
FANTOM’s OPERA Chain attempts to solve the scalability problem by designing a distributed ledger capable of handling an estimated 300,000 TPS. FANTOM is developing its own consensus protocol known as “Lachesis,” which is based on the Directed Acyclic Graph (DAG). Unlike blockchains like Bitcoin, where blocks are sequentially mined before transactions can be processed and appended to the ledger, Lachesis allows multiple event blocks to be formed simultaneously. These event blocks vary in size, each containing up to 440 transactions, and are processed asynchronously. Theoretically, this eliminates waiting times for new blocks to form and delays in writing and distributing the full ledger whenever a new transaction occurs.
Unlike other blockchain technologies, where new event blocks must verify all previous event blocks and the transactions within them, Lachesis ensures that new event blocks verify only their parent event blocks (the most recent previous event blocks). This ensures near-infinite scalability and enables the network to process an average of 300,000 TPS as more nodes join the network.
FANTOM’s technology could be applicable to real-life payment methods. Instead of using the FANTOM Token (FTM) solely as a medium of exchange, it will be possible to power Decentralized Applications (DApps) of the future, which we might use in our everyday lives, unlike many other cryptocurrencies.
https://medium.com/fantomfoundation/no-need-for-sherlock-holmes-anymore-5f615d2c433a
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