Exploring blockchain scalability by embracing all forms of consensus
Zendoo is a new solution by Horizen, that provides scalability solutions to every blockchain thanks to its consensus agnostic approach. A tailored SDK allows businesses and developers to create sidechains, each of them tapping into unique consensus mechanisms while still allowing cross-chain communication. With Zendoo on Horizen developers can explore scalability for all forms of consensus.
Before we dive deeper into Zendoo, we first need to understand what a consensus mechanism exactly is.
Consensus mechanisms are at the very foundation of every blockchain out there. Ever since the inception of Bitcoin, there has been a strongly held belief that blockchains must evolve beyond their status as a secure database for storing value. The ultimate goal is for blockchains to turn into a dynamic system for performing billions of transactions while delivering cutting-edge solutions for data authentication and transferability across a multitude of industries.
Underpinning this grand vision for the future of blockchain technology has been the desire to solve the blockchain scalability trilemma with the right consensus mechanism.
What is the scalability trilemma?
The blockchain scalability trilemma is a term coined by Ethereum founder Vitalik Buterin which described the tradeoff that developers make between scalability, decentralization, and security when designing a blockchain. It is referred to as a trilemma because, in theory, a blockchain cannot achieve scalability without compromising decentralization or security.
A network with fewer nodes requires fewer validators to confirm transactions, which means it takes less time for a transaction to be delivered on the blockchain. However, fewer nodes also push towards centralization. This means that the network runs into problems once one or more nodes were to fail.
A consensus mechanism is the set of protocols used by nodes on a blockchain or distributed ledger system to come to an agreement on the current state of the network. One way to think about a consensus mechanism is as a unique language or way of speaking that nodes must use to communicate with each other about the state of reality. Importantly, this communication cannot be intercepted or corrupted by outside actors.
The key to solving the scalability trilemma is to figure out a method of communication between nodes that is both clear AND concise.
What this means, in more technical terms, is to design a consensus mechanism that enables the least amount of nodes required to maintain data integrity and network security to broadcast only the most essential transaction details to each other. Of course, the ultimate goal will also be to achieve consensus and block confirmation in as little time as possible.
Walking the fine line between having too many nodes, too much data per block or too many built in redundancies prior to accepting new blocks and the alternative, which is just another centralized database, is the complex and delicate balance that blockchains attempt to maintain using different methods of consensus.
The most popular consensus mechanisms are:
- Proof of work – PoW
- Proof of stake – PoS
- Delegated proof of stake – DPoS
- Proof of authority – PoA
- Proof-of-History (PoH)
- Practical Byzantine Fault Tolerance – pBFT
- Directed Acyclic Graphs (or DAGs) ‘Gossip Protocol’
Each approach has its unique pros and cons which we have highlighted below:
The blockchain scalability trilemma has influenced the design of virtually every major blockchain protocol that exists today. The belief that a blockchain can be faster, cheaper and more malleable, while retaining security and decentralization has served as fuel for talent and capital to flow into this industry. The primary goal: creating a scalability-driven path to mainstream adoption.
The ‘right’ approach to blockchain scalability?
While most blockchains fiercely compete over which consensus method is superior for achieving scalability, other development teams have begun to question whether there really is a right approach to blockchain scalability: Is the competition between consensus mechanisms a winner-take-all contest? Or do certain methods of achieving consensus simply apply better to certain use cases than others?
For example, when developing a Dapp for authenticating identities on the blockchain, it is clear that security and censorship resistance should take precedence over high transaction throughput. On the other hand, if you are developing a DEX with margin trading features, transaction throughput is essential for making sure users can get their orders placed on time. In this case, it may make more sense to leverage a more centralized consensus mechanism.
Being a consensus agnostic ensures that the unique traits offered by each method can be applied in bringing your solution as close as possible to achieving perfect asymmetry between scalability, decentralization, and security as possible.
What does Horizen bring to the table?
Horizen’s core product Zendoo makes it easy to be consensus agnostic. It provides a sidechain SDK that enables businesses and developers to create custom sidechains on top of the Horizen main chain. This in turn means that they can leverage the most secure form of PoW.
Each custom blockchain can have its own unique consensus mechanism. Additionally, custom blockchains can communicate and exchange value with other blockchains in the Horizen ecosystem using its Cross-Chain Transfer Protocol (CCTP).
What this means is that a developer who is looking to build both an exchange and an identity storage and authentication solution does not need to compromise security to achieve high transaction throughput, nor speed to achieve decentralization.
Instead, they can choose to set up a PoS blockchain for one solution that is interoperable with another blockchain that uses PoW for storing and authenticating identities. In fact, developers can use as many different consensus mechanisms as they want. This gives developers more options to scale up, without compromising on for example security. Horizen also allows for public and private sidechains, while also exchanging value between the two, thanks to the use of zero-knowledge proof cryptography. These features enable developers to build applications that aren’t just blockchain agnostic but also ‘consensus agnostic’.
Developing a dapp only on Proof-of-Stake networks represents a limitation for developers to be flexible and adapt to future innovations. Horizen realized that what differentiates one blockchain from another is mainly the consensus mechanism. Therefore, providing the tools for developers to become consensus agnostic seems to be a great path for blockchain scalability solutions. Migrating from a PoW blockchain to a PoS one is currently a major challenge, but the Horizen network and Zendoo can help. The Horizen network is built to cater to all forms of consensus mechanisms.
Zendoo’s Sidechain SDK is the new React Native
If we think about consensus mechanisms as different programming languages or different operating systems that have traditionally been incompatible with each other, it becomes easy to imagine the value that can be unlocked by providing a blockchain development framework that allows multiple rules to be adopted without restriction. Zendoo can become for blockchain consensus mechanisms what Facebook’s React Native has become for the development of web and mobile applications: a framework to build upon.
Ultimately, as blockchains become more commonly adopted by companies and developers looking for censorship-resistant and transparent solutions to their business challenges. Horizen believes the question of “what blockchain should I use?” will take a backseat to “what consensus mechanisms work best for my use case?”. Horizen wants to become the bridge between different consensus mechanisms, as there’s a multichain paradigm. It’s not without reason that DappRadar integrates all kinds of blockchains into its rankings because there’s no such thing as a one-size-fits-all blockchain solution. Users’ demand for modularity will only increase as use cases become more specific and require higher degrees of customization, so Horizen is working hard to meet these demands.
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