Do you use debit or credit cards? Have you ever wondered that while you are using debit or credit card service, how many other people might be using it at the same time?
Or, how many transactions payment provider companies like Visa and Mastercard can process at the same time without slowing down?
Well, the answer is that they can process around 2000 transactions/second on average and sometimes much more than that. Now, what about Bitcoin and other cryptocurrencies network?
You might be thinking that these are the modern payment network based on sophisticated blockchain technology, so they must be having better speed than Visa or Mastercard.
But this isn’t the case. The Bitcoin network can only process around 4 to 7 transactions/second and even Ethereum’s transactions/second are only 20 to 30. It seems very slow, doesn’t it?
Well, the case with 1st and 2nd Gen cryptocurrencies is that their network gets slower as they get bigger. Why? Because the more nodes there are involved in deciding whether or not a block is valid, the longer it will take to reach a decision. This is called the problem of Scalability.
Scalability, in this context, is the ability of a cryptocurrency to deal with a huge amount of user transactions without slowing down.
Scalable cryptocurrencies will be the currencies that can process as many transactions as companies like Visa and Mastercard.
So, are there any scalable cryptocurrencies? Well, that is why I will be explaining to you about the Zilliqa Project.
What is the Zilliqa project?
According to Zilliqa’s whitepaper, Zilliqa is a new blockchain platform that is designed to scale in transaction rates.
As the number of miners in ZILLIQA increases, its transaction rates are expected to increase. Specifically, ZILLIQA’s design allows its transaction rates to roughly double with every few hundred nodes added to its network.
Now, you must be thinking that how Zilliqa will achieve this? So, behind the design of Zilliqa, there is the idea of sharding. Let’s understand what sharding is exactly.
What is sharding?
As you know that behind every successful transaction there are lots of nodes who are work to verify the transaction requests. As I mentioned above, the more nodes there in blockchain, the longer it takes to complete a transaction.
Sharding is the process of dividing a big database into small chunks just to make data simple and easier to access. These small chunks are called shards.
In our context, sharding divides the network into several smaller component networks which then are capable of processing transactions in parallel.
So, sharding divides the Zilliqa network, which obviously contains a large number of nodes, into small groups of nodes called shards. Each shard is made up of 600 nodes and it operates like mini-blockchain networks.
Now, as a result, the transaction rate in Zilliqa increases as the mining network expands, which is exactly what Zilliqa is aiming and claiming to achieve as explained above.
History of the project
The Zilliqa project was founded in 2017 by a group of computer scientists, academics, and researchers.
The initial team included Prateek Saxena, Xinshu Dong, and Amrit Kumar, among others. The Zilliqa team proposed the theory of sharding in an academic paper in 2015.
What it wants to achieve?
As I explained above that the Blockchain scalability is really an issue with 1st gen cryptocurrencies like Bitcoin and 2nd gen cryptocurrencies such as Ethereum. The 3rd gen cryptocurrencies are trying to solve this problem and this includes cryptocurrencies such as Zilliqa and IOTA.
Among 3rd gen cryptocurrencies, Zilliqa is the 1st such platform that uses sharding as a solution for scalability.
Zilliqa is trying to achieve higher transaction per second (TPS) to make transaction process very fast even when performed in high volume.
It is not just the speed of transferring your currency that will+ get benefitted from Zilliqa’s design but there are many other points where Zilliqa is aiming to bring it effect.
How can it be used?
1. Automated High-Volume Auctions
With the growing use of blockchain technology, people are now using it as an e-market also. I am sure that you know that a market is a place where buyers and sellers can meet to facilitate the exchange or transaction of goods and services.
So, now sellers and buyers are using these platforms to exchange goods & services in a more fast way and without middlemen.
For example, take the advertisement market. Ad publishers submit info on a blockchain regarding their contracts and marketers/buyers submit info regarding their requirements.
Once submitted the blockchain matches the suitable contract with suitable requirements and the deal is done. But there are limitations in the existing blockchain platforms that are providing this service.
As the popularity of this service grows, there will be a much larger number of sellers and buyers of goods & services and the existing blockchain technology is not able to handle billions of ads and ad impressions per day.
They can’t process transactions at this rate as I have explained above. In this scenario, it will be platforms like Zilliqa that will process such a high volume of daily transactions with the help of their sharding technology.
Zilliqa is building a token trading dApp suite that will allow digital tokens from several sellers to be auctioned among a set of potential buyers in parallel.
2. Decentralized Exchanges
We all know the advantages of decentralized exchanges. It allows a peer-to-peer network that isn’t operated by a central party. It has the benefits like Privacy, Security, cost-saving.
But the existing blockchain platforms are not able to do it properly because of their internal design.
The Zilliqa project can perform this task in a better way as it is already designed with sharding technology which is nothing but the decentralization of data and processes.
3. Applications Requiring Highly Reliable Results
There are services that require highly reliable results and have no scope for even a minor error.
Zilliqa claims to give such result with the technology which allows various nodes to cross-check the computational results of each other and giving totally true and reliable result.
What are the challenges ahead of Zilliqa?
1. Limitations in sharding
Sharding is the technology that makes the Zilliqa project possible but there are some problems also.
When you divide a blockchain into groups of nodes, which is what exactly sharding does, you also divide the information stored on it because nodes in shards only contain some blocks of the entire blockchain.
Now, to complete the transaction they need to have full information and for that, they will have to communicate with each other which can get very complicated and problematic when there are thousands of nodes in the network.
However, Zilliqa claims to solve this problem with a hybrid consensus mechanism though the important thing is how effectively it can implement it.
Since it is in the developing phase yet, it also needs to sort out every possible security problem to make it totally safe for users and to win their trust.
What has it achieved so far?
Zilliqa’s partnerships have surged by a whopping 70% last year, increasing from 38 in 2019 to 65 strategic partners in 2020.
The Zilliqa network has shown strong growth momentum since the MainNet launch in January 2019.
Zilliqa’s monthly number of transactions reached 1,027,263 in November 2020, around 15x of the monthly number of transactions (68,638) in April 2019. Since its launch, the daily transaction volume has grown by around 40% and has attracted tens of thousands of daily active users.
In October 2020, Zilliqa launched ZILSwap, a decentralized exchange, together with Switcheo. Currently, there are 11 registered tokens and 17 unregistered tokens listed on ZILSwap to date.
How and where can you buy Zilliqa ($ZIL)?
Zilliqa’s official website reads, $ZIL is the token that powers the Zilliqa blockchain. The tokens can be used for smart contract execution, reward miners, to cover transaction fees, and more.
You can buy ZIL either for cash or from peer-to-peer sources. You can also buy it for other cryptos, from decentralized exchanges, and from credit/debit cards.
You can buy it from exchanges such as Binance, KuCoin, Transak, Bithumb, crypto.com, or many other platforms.
Plans for future
According to its whitepaper, Zilliqa plans to research a significant number of new technologies in the future. These include:
1. State sharding
To reduce the storage and communication load for blockchain nodes, state sharding is important.
It allows the data stored by the network to be divided in the same way as the processing and consensus layers.
2. Secure Proof-of-Stake (SPoS)
As I mentioned above that the security is a must for Zilliqa. In the future, Zilliqa plans to research a secure and efficient PoS scheme, a security mechanism that distributes consensus power to the most heavily invested nodes in the network.
3. Storage pruning
A mechanism for reducing the total amount of data required to store in order to participate in the network. This can eliminate spam and dated blocks from the required data.
4. Cross-Chain Support
To provide users a broad spectrum of platforms of choice for their applications, Zilliqa is planning to complement other public blockchains also while building a healthy ecosystem.
5. Privacy-preserving computation
However the use of blockchain technology is considered secure, still, there are threats to the privacy of end-users from skilled cyber attackers.
For combating such threats Zilliqa is planning to research computation that removes the identity requirement of participating in the network so that computation is not tied to an account on the blockchain.
How are people reacting to it?
Official reports tell us that by January 2018, they have had raised roughly US$22,000,000 from early and community contributors through their Token Generation Event (TGE).
In the beginning, they did not need an initial coin offering (ICO) to develop their platform. An ICO is a way for new cryptocurrencies to fund development by selling coins to the public but they did an ICO only because so many people wanted it.
To this date, their official Twitter account has more than 282K followers and they are growing rapidly. Last year only saw a 54% increase in their Twitter community.
Current market value of ZIL
Currently, with 0.1198 USD value, it ranks at 68 in the crypto market.
What do you think about Zilliqa?
I personally am intrigued by this project and have a very healthy bias regarding it. It is a market disruptor and it will make a mark for itself.
What do you think about this project and would you be willing to invest in it? I’d like to know your opinion and stance on this.
You can always out through the comments sections and I will be more than willing to interact with you.