Parallel Chain – The Better Solution to Blockchain Scalability

Scalability improvement has been a trending topic in the blockchain community for years. Dozens of options have been proposed to facilitate more transactions in a shorter period of time, such as block expansion, Lightning/Raiden network, sharding, hierarchical architecture, and parallel chain to name a few. Don’t be scared of these unfamiliar terms. They are possible approaches to the same goal: scale the blockchain up.

Let’s say Alice lives in Zone I and Bob in Zone II on each bank of a river. Alice manages to send 10 tons of flour to Bob through a narrow bridge, the only link between the two sides, which allows passage of only one truck with 1 ton of load each time. How could Alice deliver all the flour in a minimum of time?

Block Expansion

Alice first comes up with the idea of increasing the loading capacity of truck. A 2t truck is capable of sending all the flour in 5 trips; and it will be a one-trip run if she can drive a 10t truck. However, what should Alice do if she has to send 100 tons of flour? Although block expansion seems to be the most straightforward and easy-to-do option, it is not a permanent solution to the problem due to the limitation of a block’s loading capacity. More specifically, in this option, where the transportation of flour represents the transaction, the truck does the block, and the bridge does the blockchain, we can scale up the size of blocks so that each of them carries more tx to allow faster transaction since more tx can be completed per unit time, i.e. the size of a block may be expanded from 1M to 2M, and further to 8M if necessary. However, this option ends up to the same bottleneck that bothers Alice as well: the block size can not be expanded infinitely.

Lightning Network

Alice now learns that Calvin in Zone II sends 8 tons of flour to Daniel in Zone I everyday. This inspires a new idea where they all agree that Alice sends 8 tons to Daniel on the same side, while Calvin sends 8 tons to Bob on his side, so that Alice only needs to send 2 tons to Bob. Bitcoin’s lightning network works under the same principle of this option: it relieves the heavy load on main chains with off-chain transactions. Ethereum is developing a similar mechanism for its Raiden Network. A more academic interpretation for this is that most of transactions are driven to the well established off-chain channels and only a small part of them are committed to the chain when there is a need for final verification. Looks pretty good, huh? The problem is, how could Alice know that Calvin intended to send flour to Daniel? What if Calvin needs to send 8 tons to Daniel for just once? Given that Alice and Calvin negotiate with each other at a cost, it is certain that the negotiation cost is lower if Calvin sends 8 tons of flour to Daniel on a daily basis. However, it may be a different story if Calvin only sends the 8 tons to Daniel for once. In the latter case, the cost of sending the flour through the narrow bridge directly is probably lower comparing with negotiation. According to GAIAWORLD, this is the cost required for discovering new paths and establishing new channels in the lightning network; and because of such cost, people tend to use existent paths and channels, which brings about another problem: centralization. In addition to Calvin, Alice can also negotiate with Emily, Fiona, or Greg. At the end of the day, everyone turns to Alice to deliver their flour and Alice takes control of the whole flour transportation market.

Sharding

To ensure quality of flour, a checkpoint is built at one end of the bridge and inspectors are assigned to the checkpoint. A bag of flour is released only after all inspectors have carefully checked it and approved its quality. In other words, the transportation time of a bag = time required to pass the bridge + inspection time. As each bag should be checked by all inspectors, it takes quite a while for Alice to pass. She suggests dividing inspectors into 10 groups, each checking 1/10 of the flour, so that the efficiency is 10 times higher. If the method leads to a satisfactory result, the inspectors can work in 100, 1000 or even more groups. This option should be reconsidered due to its compromised security. While Alice had to grease the palm of all inspectors in order to transport flour of inferior quality, she is much relieved to achieve the same goal by buying off 1/10 or 1/1000 of them. Developers of this option have been trying to figure out how to maintain the level of security after sharding, at least close to that before. When asked about the details, they replied: “Let’s think it over. Refer to Ethereum’s sharding option.”

Hierarchical Architecture

Alice has eventually figured out the root cause of limit – the narrow road. The load capacity will no longer be an issue if more roads are constructed, and the best way to build a new road is to add another layer above the bridge in place. This is also the principle of building hierarchical blockchain architecture: creating one or more layers of new networks above the existing one. Ethereum’s Plasma is an example of such architecture. Achilles‘ heel of this option is the narrow bridge as all new roads are stacked up on it, and it is gameover once the bridge collapses. In the implementation of Ethereum, multi-layered network is essentially a new smart contract.

Parallel Chain

Another idea suddenly pops up in Alice’s mind: why not build another bridge? The truth is, it’s extremely challenging to build and operate a bridge, and Alice doesn’t know how to build bridges as a flour distributor. G, a construction company, shows up at this time and tells Alice that the bridge can be custom-built and free of charges! The bridge is ready for use soon after hiring G. However, no one trusts the quality of flour since no security inspector has been assigned to the bridge. G starts talking again: “We would like to share inspectors from our other bridges and every one of them can work on dozens of bridges. But, you need to pay for this.” Alice agrees promptly and operation of the bridge soon gets on track. Later, Alice considers the possibility of interconnection among bridges so that she can transport the flour through all of them, which is better. G tells her that signing an interconnection protocol is just enough to achieve this goal. Nevertheless, given the complicated process of inter-bridge transportation, a special security checkpoint is necessary for inspection of trucks running across bridges. Hence, it takes more time and costs higher comparing with transportation through each bridge separately. Alice then decides to use her own bridges most of the time and have recourse to inter-bridge transportation when it is necessary. Essentially, creating a new blockchain in parallel with the existing one, sharing verifiers and exchanging values over a cross-chain communication protocol is called Value Exchange Protocol, or VEP for short.

The option of parallel chains is just streets ahead of many other options available when it comes to improvement of technical feasibility and blockchain scalability. It aims at the root cause of the problem and is a better solution to mitigation of chain jams.

To allow for a visualized understanding, GAIAWORLD has used analogies and metaphors to tell the story instead of stuffing it up with technical details of the parallel chain. Visit our website and read the whitepaper to find more!