The biggest strength of the Blockchain is at the same time its biggest weakness: the decentralized nature can slow transactions down. There is no central authority (VISA, Mastercard) with a centralized server where all transaction can be confirmed in seconds. Every transaction on a Blockchain has to be confirmed and validated by the whole network because the network is based on a global consensus. Only what the majority of the network consents to is seen as valid.
The most important elements for a high-capacity network are block-size and block-time. Bitcoin for example uses the following parameters:
- a new block is created every 10 minutes
- one block can only store 1 MB of transactions
This results in 7 transactions per second which means that it is at the moment no competitor to traditional payment systems that can process up to 4000 transactions per second.
There are various solutions to this problem that try to solve it off-chain while the Blockchain is not used. This doesn’t solve the underlying problem and only moves the point where it has to be solved into the future.
The Dash Team follows a well thought-out road-map for global scaling on the Blockchain. The founder of Dash, Evan Duffield, has offered a detail plan on how to surpass VISA and Mastercards high-capacity while remaining secure, independent and censor-resistant. Dash tries to scale “on-chain” which means that blocks have to reach a size of 400 MB to achieve 4096 transactions per second. Dashs block-time is 2,5 minutes and therefore shorter than that of Bitcoin.