Blockchain can hover over 100,000 transactions per second with the right math

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Some of the world’s most advanced distributed systems such as Halo 4, WhatsApp and LinkedIn – arguably among the global leaders in network design – use a mathematical proof called the ‘actor model’.

Major payment processing institutions such as Visa and Mastercard also use it – no doubt perking up the ears of any person who believes cryptocurrencies are a viable alternative to existing payment and remittance solutions.

Sharding is considered one of many holy grails in crypto because the division of a blockchain into several smaller networks aka shards unlocks the potential for holistic separation of traffic, instead of handling huge volumes of transactions at once in one place.

The actor model is irresistibly favorable to sharding in blockchain, with technical principles that provide a natural fit for the goal of enormous scalability.

Strictly speaking, the logic of this model does not break blockchain norms on its own – but innovative construction makes it entirely possible to scale to 100,000 TPS (transactions per second) using the underlying fundamentals.

These fundamentals provide a very modern model for distributed networks.

First-movers in technology often have a significant advantage, and the same may prove true for engineers using smartly adapted mathematical proof for a massively scalable blockchain.

Why the acting model is so technically good

The actor model was first introduced by Carl Hewitt in 1973 and has since been successfully implemented, for example in the Akka library using the Scala programming language and OTP (Open Telecom Platform) using Erlang.

If anything, this indicates a highly adaptable mathematical proof.

We had neither the tools nor the conceptual vision to design modern DLT 40 years ago when Ericsson led the adoption of the actor model by deploying it as software on top of hardware routers.

Still, it’s entirely possible that this was the beginning of a quiet revolution that ended with blockchain mass adoption, and ultimately, the integration of the technology into our everyday lives.

If this will be the case, it is instructive to learn exactly how the actor model works. Even those without a solid mathematical or even computer science grounding can easily understand the unmistakable logic of applying it to blockchain.

The actor model states that a computational atom is an “actor” applied to blockchain – simply means the user account.

For explanatory purposes, we will refer to the actor as an “account” – or in many cases “smart contract”. Within each account is a unique ID – or wallet address – and data and message processors to transfer this data.

The account’s role allows it to receive messages, change its state, and change its behavior (code) – as well as create (distribute) other accounts.

Accounts are the basic unit of computation responsible for communication, and are therefore responsible for determining how transactions should be processed. Accounts further retain their own private state completely isolated from other accounts in a major boon to the security and stability of the network.

Perhaps the biggest headline benefit is the phenomenal scalability of a blockchain that uses the actor model and leverages the multifaceted nature of accounts.

Neatly solves the scaling problem

Envisioning 100,000 TPS is difficult, while calculating them in a stable and safe way is a huge task. And an account in this model is limited to sending up to 255 messages to other smart contracts, which on the surface implies a TPS limit of only a few hundred.

However, clever engineering can overcome this limit and exceed the limit.

Using a recursive pattern to send messages from a single account to itself – essentially repeatedly using the messaging process – the limit increases exponentially into the high tens of thousands, if not greater.

A single external message to a given smart contract can spawn a huge number of follow-up messages all containing token transfers, NFT transfers, or other types of transactions on the blockchain.

Within the actor model, developers are able to design and implement smart contracts without relinquishing control over the communication, and indeed the coordination, between nodes in a decentralized network.

What this could mean is a huge leap forward in the CeFi versus DeFi debate.

A current challenge in the space is finding a workable trade-off between decentralized principles and actually ensuring that the technology delivers on its promise. – often achieved by accepting that there will be a centralized aspect and therefore a focal point for failure.

Everything changes when the actor model is implemented. Each account has a unique address deterministically calculated as a hash (stateInit), where stateInit denotes its original data and contract data. All of this is packed into a special tree-like data structure called a “TVM cell.”

Imagine that a newly created account sends its first message. The first message – or transaction – starts a chain that can grow exponentially according to data flow requirements with the result of exponentially increasing capacity.

As a finite rhizome, a single account can meet multiple other accounts on the blockchain and send transactions between each other. All with the goal of creating a massively scalable network capable of handling, say, the largest NFT (non-fungible token) drop in history while handling significant capital and information flows in traditional industries.

A secure and decentralized network is possible

On-chain distribution is widely used in production systems that consist of different smart contracts that need to communicate with each other.

Any smart contract built on the actor model logic on such a blockchain – so it accepts an external or internal message – can start the process of sending transactions.

A special distribution message can be sent by an account containing the code and initial data, thus triggering on-chain distribution of a new smart contract.

A massively scalable blockchain must ensure that newly distributed factory contracts are set up in a way that ensures total compliance when it comes to code.

Otherwise, parts of the blockchain are exposed to security risks, and in the worst case they become victims of malicious actors who code smart contracts to act in a way they are not supposed to.

Using the actor model simply means that when a user signs up, the new account must send messages to a smart contract. Otherwise, their account will not be able to deploy and become active.

This works to align new accounts with all other accounts on the blockchain, thereby reducing the risk of attackers constructing smart contracts to behave in unintended ways.

A set of rules for accounts in how they behave with each other therefore provides the ability to process countless transaction volumes while handling errors gracefully and without ever posing a risk to the network.

The actor model has been around for decades, quietly powering some of the world’s best distributed networks. But when applied to blockchain, it provides a structure for efficient concurrent computation that the industry sorely lacks.

But this does not solve all problems – consensus and ultimately raw computing power require equally innovative solutions.

Christopher Louis Tsu is the CTO of the Venom Foundation blockchain and a veteran entrepreneur with 37 years in technology, where he founded four startups in EDA, electronic design automation tools, digital TV, satellite communications, and medical biotechnology.

Featured image: Shutterstock/Sergey Nivens