Blockchain platform is the backbone of any decentralized applications. Blockchain based decentralized app developers interact the platform with special tool called node. While they use multiple programming libraries on the frontend, nodes will fetch the latest ledger information from network peers, interact with libraries from publicly exposed API endpoints, and deploy contract or contract transactions to the network. While we ensure the components like libraries or p2p connection are robust and stable, what makes the development on Blockchain unstable is the slow confirmation time of the transaction and overload of the network.
Almost every Blockchain platforms regulate transaction capacity to ensure the guaranteed quality of Blockchain, for example every Blockchain consensus have their own writeable nodes, which in case of the PoW Blockchains are mining nodes and for DPOS it is called Block Producer and every nodes must have the stable connection between them which means the input of the transactions must be limited under the number of the writeable nodes can handle. This is what we call the degree of network stability.
While we build decentralized applications on different kinds of Blockchain platforms, for example, Tether coin was meant to build on Bitcoin’s 2nd chain layer solution called Omni layer. However, due to the expensive price of transferring the token on Bitcoin network and the lack of network capacity pushed Tether to issue on multiple smart contract supported chains like Ethereum, Tron, or EOS. However, the problem has not been solved, and they are still looking for opportunity to issue their token on reliable platform.
What makes the DApp platform reliable is the amount of how much can DApp can hold it’s users and it is being determined by several various factors of the characteristics of the Blockchain. In short, there are few known requirements for Blockchain platforms to successfully host the Blockchain applications.
What we want from Blockchain applications could be the unique function. However, every known decentralized applications are not very different from any legacy internet applications, from gambling to issuing new tokens, legacy internet can do it better than any decentralized applications until they meet the requirements of gaining widespread use.
Let’s think of building a DApp that is in competition with bigger services such as Uber, Amazon, Facebook, or eBay. Their common ground is that they offer cheap solution for their customers and their business model is to handle larger traffics than their competitors, they collect lower margin per customers however they gain bigger market shares. To fulfill their customer’s demand they often develop their IT infrastructure to scale by the demand.
If those big players growth were limited by the capacity of the network, they wouldn’t be able to thrive like they were in now. And if the Blockchain applications were trying to replace their position, it will likely fail since no one will use their platform without solving the problems of transaction costs and network capacity. Due to the small capacity of the Blockchain platforms, it is normal that a single DApp would occupy most of the allowed transaction capacity of the network. EOS and Ethereum might be a good example.
Before we deploy any kind of financial contracts on the Blockchain, Bitcoin used to serve as a backbone or foundation of the digital payments where cryptocurrencies are needed as an alternative to PayPal or Visa from online shops, where we use the cryptocurrencies with legacy web 1.0, it was normal to use Bitcoin for cheaper payments and faster transactions, for example, buying a coffee with Bitcoin. However, due to increased rate of transaction fee and limited capacity of network, it is almost impossible to buy a coffee with Bitcoin.
Like those examples demonstrate the problem where scalability is a necessary feature for all kinds of Blockchain applications, whether or not it supports web 3.0 or smart contracts, scalability should be considered as a primitive accomplishment and the platform could scale by the demand. Without those concerns the Blockchain platform or the decentralized applications on that platform will likely end up as a vaporware.