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Scalability is one of the major problems of blockchain technology. You can see this well in the example of Bitcoin. The Bitcoin blockchain is currently overloaded with traffic in the Bitcoin network.
The result is significantly higher transaction fees. The same applies to Ethereum. The success of various crypto currencies in recent months shows the limits of the current blockchain technology. The platform Zilliqa wants to find a solution and make the blockchain technology more scalable.
What does Zilliqa want to achieve?
Blockchains have an inherent scalability problem. The more nodes there are in the network, the more difficult the consensus algorithms work. The speed at which consensus can be reached in a blockchain depends directly on the size of the network.
Solutions to this problem generally focus on storing certain information off-chain or increasing the block size. These solutions may be successful for some time, but they do not solve the basic problem of scalability.
How Zilliqa Works
Zilliqa has found a way to have more transactions performed on a blockchain as more nodes join the network. The makers of the platform have completely reapproached the blockchain technology. The consensus protocol developed by Zilliqa increases the network throughput of all 600 joined nodes. The technology would enable scalability from blockchains to a million nodes. To put this in perspective:
The Bitcoin block chain currently has about 11,000 nodes. Ethereum, the largest blockchain network to date, brings it to 25,000 nodes. Bitcoin's and Ethereum's networks can handle about 3-15 transactions per second. Initial tests in a private network have shown that Zilliqa can handle 1218 transactions per second with 1,800 nodes.
The secret behind the Zilliqa network is a technique called Sharding. Zilliqa's protocol divides the nodes in the network into groups of 600 nodes each. Each of these groups is a so-called Shard.
In a Zilliqa network with 3600 nodes, 6 shards would be represented. These shards each process a part of the transactions in the network. Put simply, with 6 existing shards, each shard would also handle one sixth of the transactions. The more shards there are, the more the network can distribute the workload. Each shard processes its assigned transactions into a so-called microblock.
At the end of the processing, the micro-blocks are reassembled into a large block, which is then added to the block chain. As part of their work on the Zilliqa network, the creators have also developed a new programming language called Scilla.
The disadvantage of the Sharding technology is that blockchains have only limited processing possibilities for smart contracts. Ethereum is currently working on a solution to change this.
Who is behind Zilliqa?
The team behind Zilliqa consists to a large extent of proven IT experts. The current CEO of Zilliqa is Xinshu Dong, who has made a name for himself in both science and practice as an expert in building secure systems. He also has extensive experience with blockchain technology and has been the technical director of several national cyber security projects in Singapore.
He is supported by CMO Christel Quek, a co-founder of BOLT. Quek has a track record of success in the IT industry and has been involved in a number of projects. Zilliqa's CSA, Prateek Saxena, holds a professorship in Computer Science at the Nationa University of Singapore with a focus on blockchain and computer security. A total of 11 people are working on the Zilliqa project.
The Zilliqa (ZIL) Token
Zilliqa has also developed its own crypto currency for the platform's ecosystem. The Zilliqa token serves as a reward for mining activities and for paying transaction fees in the Zilliqa network. Currently, the Zilliqa token is still based on the Ethereum blockchain. When the Zilliqa network goes online, the crypto currency will also move to this network.
At the end of 2017, Zilliqa was able to raise about $12 million in Ethereum in a private investment round. The rise in the exchange rate has now made 20 million US dollars available. A public sale took place in January 2018.