Zilliqa is a high-throughput blockchain platform that aims to compete against major financial service providers like Visa by processing payments with lower fees at faster rates in a decentralized manner.
Previous to its official launch on January 26, Zilliqa was recognized as one of the most highly anticipated initial coin offering (ICO) debuts in the market. Within a week since its launch, the market valuation of Zilliqa surpassed $500 million, even throughout the recent correction in the cryptocurrency market that led most cryptocurrencies to fall by at least 50 percent from their all-time highs.
Scalability has been a key problem for all public blockchain networks in the global cryptocurrency market. Ethereum, which has many scalability problems of its own, remains as the only blockchain network processing over a million transactions on a daily basis, according to data provided by Etherscan.
At the Disrupt SF 2017 conference hosted by TechCrunch, Ethereum founder Vitalik Buterin emphasized that there needs to be a significant amount of work done by Ethereum’s core developers and the Ethereum open-source development community to speed up the implementation of scalability solutions because the network is being congested with popular decentralized applications like CryptoKitties and EtherDelta.
At the time, Buterin noted that the Ethereum network is processing around 5 transactions per second and stated that the capacity of the Ethereum blockchain network is nowhere sufficient to support decentralized applications with millions of active users, echoing the viewpoint of Coinbase co-founder Fred Ehrsam.
“Bitcoin is currently processing a bit less than three transactions per second and if it goes close to four, it is already at peak capacity. Ethereum has been doing five per second and if it goes above six, then it is also at peak capacity. On the other hand, Uber on average does 12 rides per second, PayPal several hundred, Visa several thousand, major stock exchanges tens of thousands, and in IoT, you’re talking hundreds of thousands per second.”
Zilliqa, as a second generation blockchain network, is able to handle about 2,500 transactions per second and is able to process a daily transaction volume that is 625 times larger than that of the Bitcoin blockchain network.
The development team behind Zilliqa demonstrated the first commercial usage of Ethereum’s Sharding, an important scaling solution which the Ethereum open-source development community has been working on for several years. Sharding eases the mining process by separating mathematical problems of solving a block to many tasks, preventing miners to work on the same problem as other miners in the ecosystem.
“Zilliqa is a new blockchain platform capable of processing thousands of transactions per second with sharding built into it. With sharding, Zilliqa has the potential to match throughput benchmarks set by traditional payment methods (such as VISA and MasterCard). Even more importantly, Zilliqa’s transaction throughput increases (roughly) linearly with its network size —a feature missing in all popular blockchains,” the Zilliqa team explained.