PUBLIC BLOCKCHAIN SCALABILITY: ADVANCEMENTS, CHALLENGES AND THE FUTURE

In the last decade, blockchain has emerged as one of the most influential innovations in software architecture and technology. Ideally, blockchains are designed to be architecturally and politically decentralized, similar to the Internet. But recently, public and permissionless blockchains such as Bitcoin and Ethereum have faced stumbling blocks in the form of scalability. Both Bitcoin and Ethereum process fewer than 20 transactions per second, which is significantly lower than their centralized counterpart such as VISA that can process approximately 1,700 transactions per second. In realizing this hindrance in the wide range adoption of blockchains for building advanced and large scalable systems, the blockchain community has proposed first- and second-layer scaling solutions including Segregated Witness (Segwit), Sharding, and two-way pegged sidechains. Although these proposals are innovative, they still suffer from the blockchain trilemma of scalability, security, and decentralization. Moreover, at this time, little is known or discussed regarding factors related to design choices, feasibility, limitations and other issues in adopting the various first- and second-layer scaling solutions in public and permissionless blockchains. Hence, this thesis provides the first comprehensive review of the state-of-the-art first- and second-layer scaling solutions for public and permissionless blockchains, identifying current advancements and analyzing their impact from various viewpoints, highlighting their limitations and discussing possible remedies for the overall improvement of the blockchain domain

Viability of Public Blockchains in the Financial Services Sector

Blockchain technology has significant potential in developing the financial services sector. Although blockchains are often undifferentiated in contemporary discussion, they are, in fact, divided into three types: public, private and consortium. Thus far, the financial services sector has focused on developing private and consortium blockchains while eschewing the innovative aspects of blockchain present in the public blockchain. Through a literature review this thesis will examine the validity of the issues leading to such a decision, suggest ways that the public blockchain could potentially innovate the financial services sector and discuss the future of public blockchains in the financial services sector. This thesis found that while the current reservations regarding public blockchain implementation are valid, new public blockchain research and solutions are increasingly rendering these reservations obsolete. In addition, public blockchains contain inherent advantages such as incorruptibility, transparency, reduction of intermediaries and increasing financial market participation over their more private counterparts. Although public blockchains represent a threat to the financial services sector’s existing revenue model, the improvements in public blockchain technology will present unique opportunities that will at least have to be considered by companies in the sector. In the meantime it seems that symbiotic private-public and consortium-public blockchain solutions will be adopted in the near future