In an earlier blog (“Blockchain is looking for Scale: a Balancing Act, Part I + II, 18 June 2018) I showed how the blockchain world was trying to solve the scalability issue. There I concluded that it was “hard labor” to solve the so-called Scalability Trilemma.
That means reaching enough scalability without compromising transparency and security.
Last month an interesting experiment was announced by researchers at the University of Sydney in . They claimed to have successfully trialed a blockchain on a global scale, named Red Belly Blockchain, after one of Australia’s most deadly snakes. The University
believes that this fork-free blockchain solution, can rapidly scale transactions thereby significantly exceeding the throughput of the Bitcoin and Ethereum networks.
“So far, blockchain had not shown that it could scale and we wanted to demonstrate that a blockchain technology could scale in the number of participating machines and have performance maintained or improved with an increasing number of participants.”
Dr. Vincent Gramoli, head of Concurrent System Research Group at the University of Sydney
Blockchain networks fail to reach scale
Blockchain networks like Bitcoin and Ethereum have not been able to make it as a mainstream payment method so far due to slow transaction speeds. The time taken to process transactions on Bitcoin blockchain at the moment takes anywhere between 15 minutes
to few hours “on a good day”. At times when the cryptocurrency network is backlogged, it could take almost a day for transaction confirmation.
“There’s public blockchains like bitcoin and Ethereum that don’t try to solve consensus ahead of time … but then later try to avoid forks … which means the latency is quite large.” “It doesn’t rely on a [consortium leader like R3] because having a leader
was a bottleneck to scaling. We discovered that transaction verification was also causing a bottleneck, so we improved consensus and the verification process and we were able to scale the performance.”
Dr. Vincent Gramoli
The Red Belly Blockchain
The network, called Red Belly Blockchain is being developed by researchers at the University of Sydney’s School of Information Technologies. The university's blockchain was designed in part to avoid common problems currently plaguing digital transactions,
such as the limitations of forkable blockchains – which includes blockchains like Bitcoin and Ethereum.
These forkable blockchains are subject to a balance attack exploit, where users can issue a balance attack to double spend and steal assets from the blockchain.
With that in mind, the Red Belly Blockchain differs from proof of work blockchains. The network hopes to solve the scalability issue by using an alternative and unique consensus algorithm instead of the proof-of-work mechanism adopted by most public networks,
including Bitcoin. The system enforces integrity initially rather than recovering from inconsistencies, as contrasted to Bitcoin “selecting the longest branch from a forked chain or tree where multiple nodes add different blocks at the same point before learning
of the presence of other blocks”.
The Red Belly Blockchain doesn’t consume as much electricity, although it still ensures the security of hundreds of thousands of seconds per client across trustless clients. It offers performance that scales without an equivalent increase in electricity
consumption. This in contrast to the traditional blockchain networks. There the compute needed to solve crypto-puzzles fast enough in other systems typically slows down the creation of blocks and requires massive amounts of energy.
"Real-world applications of blockchain have been struggling to get off the ground due to issues with energy consumption and complexities induced by the proof of work." Dr. Vincent Gramoli
The hybrid Red Belly Blockchain is a “community’ ledger whose technology lies between the public blockchains like that of Bitcoin and Ethereum where latency is an issue and the consortium blockchain approaches like R3 which can be a barrier to scale. The
Red Belly Blockchain will be the first blockchain being built to work both in public and private contexts. It would allow for the exchange to occur in a peer-to-peer fashion, as well as in an industrial environment restricted to certain users.
Various trials of the Red Belly Blockchain have been underway over the past three months, and the technology continues to improve as it scales up. The tests were conducted to ensure the Red Belly Blockchain could operate across continents with no decrease
“Our latest tests showed the Red Belly Blockchain can process more than 660,000 transactions per second on 300 machines in a single data centre”. “This is a notable improvement from our tests earlier in the year, which showed our blockchain achieved a
performance of more than 440,000 transactions per second on 100 machines.” Dr. Vincent Gramoli
The Red Belly Blockchain’s latest round of testing took place across 1000 nodes using 300 machines in 14 geographical regions running on the Amazon Web Services (AWS) global cloud infrastructure, including North America, South America, Asia Pacific, and
In the most recent large-scale experiment conducted last month, by Australia’s national science agency, CSIRO’s Data61, and the Concurrent Systems Research Group at the University of Sydney, the Red Belly Blockchain processed financial transactions 50%
faster than first anticipated. This successful large scale experiment of blockchain technology provided 30,000 transactions per second, demonstrating an average transaction latency – or delay – of three seconds, which significantly exceeds the throughput of
Bitcoin and Ethereum networks.
Red Belly Blockchain in perspective
The Red Belly Blockchain outperformed current leaders in terms of worldwide payment processing speeds. To put these numbers in perspective, Visa’s network – which isn’t based on blockchain technology – has a peak capacity of approximately 56,000 transactions
That scale is especially much higher in comparison with other existing blockchain networks.The bitcoin blockchain is limited to around seven transactions per second with an average confirmation time of 10 minutes. The ethereum network can scale up to 20
transactions per second.
“Our results confirmed that our blockchain achieves better performance than existing technologies used by financial institutions – including VISA – even when the machines that have to collaboratively provide the service are located in different continents.
We do not know of any other blockchain solution that can achieve this.” Dr. Gramoli
Red Belly Blockchain may solve a number of issues plaguing previous blockchain system, such as low throughput (so how many units of information can be processed in a short amount of time), double spending and environmental impact from significant energy
The Red Belly Blockchain system has proved to be much faster than existing systems, drastically speeding up crypto currency transactions. The new system is expected to allow secure and almost instantaneous digital transfer of virtual currencies across the
world, touted as faster than existing systems in place. Capable of working in both public and private setups, the breakthrough blockchain technology can not only support existing cryptocurrencies, but it will also make it easier to create and implement blockchain
solutions capable of handling large volumes of data.
Being much faster than existing systems, Red Belly removes the risks of double spending where an individual spends their money twice by initiating more than one transaction. The double spend risk is one that has “plagued previous generations of blockchain
"As opposed to mainstream public blockchains, ours is not subject to double spending -- when an individual successfully spends their money more than once -- because its chain of blocks never forks." Dr. Vincent Gramoli
Red Belly is underpinned by a unique algorithm and offers performance that scales without an equivalent increase in electricity consumption. The Blockchain is much more (user) friendly to the environment because it requires much less electricity than blockchains
maintained by proof of work and based on solving crypto puzzles, a highly computational task that slows down the creation of blocks and requires massive amounts of energy.
“Real-world applications of blockchain have been struggling to get off the ground due to issues with energy consumption and complexities induced by the proof of work. The deployment of Red Belly Blockchain shows the unique scalability and strength of
the next generation ledger technology in a global context.” Dr. Vincent Gramoli
The next stage for the Red Belly Blockchain is to develop a recommendation system to automate the selection of the participants of a consensus instance which USYD hopes will ensure the security of the blockchain. This is very much needed to solve the Scalability
Trilemma and meet both the scalability, transparency and security pillars.
If the test can be successfully carried into a working model, it could help the banking industry attain the scale needed to put blockchain networks into the mainstream. The company is however not limiting its use to the banking sector but said that there
have been some early stage projects involving banks. Other steps are to take the blockchain to the public. They want to make the Red Belly Blockchain available to all internet users.
CSIRO's Data651, Australia's national sciece agency is thereby questioning the algorithm behind a successful business model, and whether a platform model can evolve into one that boasts a more distributed, federated value chain where more than one entity
The experiment highlights Red Belly Blockchain's scalability making it ideal for faster processing of financial transactions and microgrids that use peer-to-peer trading to transform the energy sector.
Seven of the top 10 global companies by market cap are platform companies. But Data61 is “looking to a future where a distributed business model has the potential to dethrone the kings”.
"We think we're heading towards a new class of entity that we're calling industry utilities - shared infrastructure, data cooperatives, open standards-based with more participants in the value chain benefiting." Data 61