This document summarizes a talk on scaling blockchain transaction capabilities. Currently, blockchains can only process a few transactions per second, far less than companies like Visa. The talk discusses several options for improving transaction speeds, including using databases, implementing sidechains with multiple smaller blockchains, and creating payment channels that allow unlimited transfers between two parties without blockchain transactions. However, there is no single solution, and each option has drawbacks around trust, complexity, and on-chain transaction requirements. Scaling blockchain performance is possible through a combination of approaches.

1. OMM Solutions
TECHtalk #7
27.09.2017 < OMM Solutions GmbH > 1
www.tech-talks.eu

2. Einmal im Monat ist TECHtalk Zeit! First come first served!
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3. Talk: Scaling Blockchain Transaction
Are 1000000 Transactions / second really possible?
Speaker: Olaf Horstmann
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4. e.g. every ~10minutes for a Bitcoin-transaction
A transaction on the blockchain takes time X to “finalize”
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Block
1
Block
2
Block
3
Block
n
…
$ / i
Hash from last block
$ / i
• verifies Transactions
• “builds” Block
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5. • VISA
• average of 2000 tps
• capable of 56 ktps
• PayPal
• average of 150-200 tps
• Alipay
• record of 1.05billion transactions in a single day
• peak of 120ktps
• Bitcoin
• max: 3-6 tps
• Ethereum
• max: 5-10 tps
• in comparison: Uber does 12 rides per second
Blockchains don’t really compare to payment processors yet
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tps = Transactions per Second
[1] https://usa.visa.com/dam/VCOM/download/corporate/media/visa-fact-sheet-Jun2015.pdf
[2] https://web.archive.org/web/20141226073503/https://www.paypal-media.com/about
[3] https://www.techinasia.com/alibaba-alipay-1-billion-transactions
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6. Every transaction is broadcast to the whole network
• Huge amount of data if everyone has
100% of the transaction-data
• Bitcoin Blockchain already >160GB
• Some delay until everyone received the
information
Why do Blockchains perform so poorly?
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$ / i
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7. Database-based Service
• Third-party service like PayPal or VISA
• Everyone transfers their money to the service and can then
execute transaction to other members of the service
Option 1
How can we improve the performance?
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8. Sidechains with 6-10 tps each
Option 2
How can we improve the performance?
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Chain A Chain B Chain C Chain D Chain …
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9. Payment Channels
Option 3
How can we improve the performance?
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Alice transfers
1 BTC
1 BTC refund after 30 days (or any other time)
Bob creates channel with
Refund-Confirmation
“Shared Account” (Multisig)
1 BTC
0.9 BTC
0.1 BTC
after TX #1after TX #2
0.6 BTC
0.4 BTC
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10. Payment Channels can also work across multiple parties
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0.1 BTC
0.1 BTC
0.1 BTC
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11. Payment Channels could result in an internet-like structure
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Mesh-Network Few Main-Nodes / “Internet of Money”
Amazon
Shell
Random “Big” Node
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12. • SQL Database
• Very scalable, very fast
• Off chain transactions already offered by some services (e.g. Coinbase)
• Sidechains
• Scaling through many(hundreds) smaller blockchains with each chain having
a limit of 6-10 tps
• Payment Channels
• (almost) Unlimited payments between two parties
Options and their benefits
How can we improve the performance?
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13. • SQL Database
• Need to trust a third party
• Service can be hacked
• Sidechains
• Transactions between two chains require two transactions
• Payment Channels
• Requires a “channel” to be opened prior to a transaction
• at 6tps, this would result in only ~200mio channels / year
• Only helps if there is more than one transaction between two parties
Options and their drawbacks and risks
How can we improve the performance?
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14. But there is not „that one solution“
Scaling is possible!
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15. Vielen Dank für Eure Aufmerksamkeit!
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16. Ihr persönlicher Ansprechpartner
Fragen oder Interesse?
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Olaf Horstmann
Technology & Innovation
OMM Solutions GmbH
Vor dem Lauch 4
70567 Stuttgart
Germany
oh@omm-solutions.de
+49 (0)711 75 86 46 04

17. 17< OMM Solutions GmbH >
www.omm-solutions.de
OMM Solutions GmbH
Vor dem Lauch 4
70567 Stuttgart
Geschäftsführer
Martin Allmendinger
Malte Horstmann
Olaf Horstmann
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