For most of the short history of cryptocurrency, scaling has been a prominent issue that has largely remained unsolved. Different projects have tried and many solutions are in the works, but no single dominant method has emerged victorious.
However, a new platform is being developed that looks to take some of the best parts of a few different systems and merge them to create a protocol that finally checks all the boxes when it comes to a viable scaling strategy. Will it ultimately become adopted? We’ll explore the pros and cons, below.
The Blockchain Scalability Trilemma
If you’re reading this, it is plausible that you are familiar with the scalability problem found in most blockchains. Essentially, these networks need to be scalable, secure, and decentralized. Blockchains like Bitcoin and Ethereum are secure and highly decentralized, but their ability to support large numbers of users can be an issue.
Other blockchains, like TRON and EOS, are secure and scalable, but at the cost of centralization. It should furthermore go without saying that any blockchain that isn’t highly secure really isn’t worth much attention.
Few projects have found an acceptable balance between all these aspects, but many are currently trying. While different solutions are being explored, one of the more promising is a process called sharding. Sharding is the scalability method that will eventually be coming to Ethereum, and it works by splitting up the blocks on the network into “shards.” Different miners only need to validate certain shards, not all the data in the network, which should massively increase the throughput of the whole system.
This is promising in theory, but current models focus mainly on Proof of Stake (PoS) sharding techniques. As opposed to Proof of Work (PoW), which utilizes the processing power of every miner on the network, PoS works by selecting validators based upon how much of the native asset they have “staked.” In this way, those with Ethereum, for example, could stake their ETH in order to have a chance to be selected to validate shards in the next block. This system is promising in that it should speed up the blockchain but does have a few drawbacks, which we will discuss in a moment.
This is where Jax.Network, powered by the JaxNet protocol, is different. Its developers are looking to continue to use PoW sharding along with merge-mining and a unique reward system in order to finally tackle this elusive problem in cryptocurrency once and for all. The Jax.Network project began in 2018 when founder Vinod Manoharan decided he wanted to solve this trilemma himself. So, he moved to Ukraine and assembled a team of experts, and began general conceptualization and research on the project.
This led to the May 2020 release of the Academic Paper, which outlines how the project is designed to work and fully showcases the mathematics involved. Additionally, the team is hoping to have an early Initial Exchange Offering of JAXNET Coins by the end of 2020, and follow up with launching both the testnet and mainnet by early 2021.
What makes JaxNet different from other scaling solutions is that it combines multiple techniques to come up with a system that should solve all aspects of this issue.
As mentioned, it implements a PoW system instead of PoS, and this is due to the fact that PoS systems have a few potential downsides. One, they can still risk centralization, as those with the most assets can of course stake the most validating positions on the network, which could compromise security. To combat this, many PoS systems occasionally re-assign validators randomly, making it difficult to predict how much or which parts of the network a given entity will validate on future blocks, but doing so slows down the system and still offers less sway to those with fewer resources.
Alternatively, the PoW system that the JaxNet protocol uses actually works much like the Bitcoin PoW system already does, however with sharding implemented. The introduction of sharding allows JaxNet to deploy what is referred to as a “super light client.” Basically, thanks to the fact that not every node needs to download and verify full blocks, the system gets a comparable speed boost to its PoS counterparts.
However, JaxNet’s blockchain also enables something called “merge mining.” Merge mining, in this sense, refers to users being able to simultaneously mine multiple shards on the same network, and in fact have control over which shards those are. Hence, miners can mine only some shard blocks in the network that are relevant to them and also aren’t limited to single shards.
This in turn increases security, as the hashrate of the network is shared across multiple shards. On top of that, since miners individually control which shards they mine, it is harder to coordinate attacks as there is no way to know whether other miners may be working on the same shard or shards.
This system is further enhanced to be decentralized by the rewarding mechanism that is being employed. Basically, a miner is given a reward proportional to the amount of hash power he contributed to securing the network. In essence, it works very much like Bitcoin except that the reward is proportional to the hashrate of the miner and is split evenly across the shards that are mined by the miner. This architecture helps preserve decentralization, as a miner can take on more or fewer shards depending on their system’s processing power and be compensated proportionally.
Smaller miners don’t get left out due to the “all or nothing” competitive mining seen in Bitcoin and similar systems, and it also eliminates the need for mining pools. Instead, miners can directly apply whatever hash power they have and still see profits from it, without ever compromising the speed or security of the whole network.
There’s Still Work To Be Done
All of this sounds quite optimistic, but as mentioned there isn’t a working product just yet. The project is in the proof of concept stage and it does appear like the team is keeping up with the roadmap, which means we should see the Initial Coin Sale before the end of 2020. Assuming all goes according to plan, there should also be a working mainnet by May of 2021. This will be the real test of the protocol, when users can see how it is working in practice and decide if it lives up to the hype.
Even if at launch the system proves to be sufficiently secure and decentralized, it will take time to see how well it truly scales. Technical aspects aside, if JaxNet is unable to draw in a sizable user base before other blockchains find their own solutions, it could still be left behind. That being said, projects like Ethereum and Cardano are moving along rather slowly, so the possibility of them being eclipsed by a new and cunning technique is still very much on the table, especially if the new product can deliver results.
Ultimately, it is going to be up to the community to determine if this is a viable blockchain scaling solution. For those interested in digging deeper into how the whole system operates from a technical level, the project’s whitepaper should offer some good insight, and the team’s blog has regular updates which help explain how the technology is going to work.
Obviously true and effective blockchain scaling that doesn’t compromise decentralization or security is one of the Holy Grail’s in cryptocurrency right now. If Jax.Network can deliver what they are developing, then it is just possible that pretty soon this problem will have at least one functioning solution. Nonetheless, the history isn’t written yet, and we will likely have to wait until well into next year before we can say for sure if this is the correct path, but the road ahead is looking bright.