Is this the platform to tackle the scalability issues facing the blockchain world?
Scalability is one of the biggest challenges facing existing blockchain platforms. As bitcoin, Ethereum and a host of other big players continue to brainstorm and test scaling solutions, there are several new projects at varying stages of development designed to offer a much higher transaction throughput.
Zilliqa is one of those platforms. Billing itself as a “next-gen high throughput blockchain platform”, Zilliqa uses sharding in an effort to scale up to thousands of transactions per second.
So, how does it all work and does Zilliqa have what it takes to deliver the goods? Let’s take a closer look.
Quick guide: How to buy ZIL
- Sign up for a cryptocurrency exchange like BC Bitcoin.
- Register and verify your account.
- Select "Buy coins" in the navigation.
- Choose the coin you want to buy.
- Select the currency you want to pay with (eg GBP).
- Enter how much you want to spend.
- Review the calculated fees and your total spend.
- Enter your wallet address.
- Review the transaction details.
- Enter your payment details.
This is our quick guide to just one way to buy ZIL. Compare some other options in the table below.
What is Zilliqa?
Zilliqa is a public blockchain platform designed to process thousands of transactions per second. One of the biggest problems facing many blockchain platforms is a lack of scalability – essentially, the larger a network gets, the harder it is to reach consensus, and the average per-second transaction rates of many cryptocurrencies leave a lot to be desired.
Through the use of sharding – dividing the network into several smaller component networks that can process transactions in parallel – Zilliqa’s transaction rate actually increases as the mining network expands. Theoretically, Zilliqa will be able to match and possibly even exceed Visa, the largest payment processor in the world.
The platform will also be designed to support smart contracts and dapps, allowing users to build and deploy decentralised exchanges, financial algorithms, high-performance scientific computing applications and more.
Where to buy Zilliqa
How it works: The technology behind Zilliqa
Other popular solutions under consideration to solve the blockchain scalability problem include moving some information off-chain, or increasing the block size. While they certainly offer improvements, they fall well short of offering the transaction throughput needed by the increasing number of applications built on smart contract platforms.
Zilliqa’s solution is to implement sharding, which basically takes a “divide and conquer” approach to scaling. There are multiple forms of sharding in Zilliqa – network sharding, transaction sharding and computational sharding – but network sharding is the most critical.
Network sharding involves dividing the Zilliqa network into separate groups of nodes, which are called shards. In practice, for security reasons, Zilliqa requires every shard to have at least 600 nodes.
However, for the sake of a simple explanation, let’s assume that if the network has 1,000 nodes, it can be divided into 10 shards that each consist of 100 nodes. Each shard can process transactions in parallel, so if one shard can process 20 transactions per second (hypothetically), then the powers of all shards combined can process 200 transactions per second.
And because these shards can process transactions in parallel, the more nodes that join the network, the more transaction throughput Zilliqa can handle.
Achieving consensus: When PoW met BFT
Zilliqa’s network uses a hybrid consensus mechanism. Proof-of-work (PoW) is used to establish mining identities, to perform network sharding and to offer protection against so-called Sybil attacks (when malicious nodes create multiple identities and try to influence the decision-making process).
However, PoW is not used for consensus, and Zilliqa instead relies on a practical Byzantine Fault Tolerant (pBFT) protocol. Used within each shard, this mechanism offers higher throughput and also guarantees finality, with the last step of the protocol requiring nodes to sign that they have all seen and agreed on the block.
Transactions per second (TPS): Zilliqa vs the competition
With the ability to process 8,000 transactions per second, Visa is the largest payment processor in the world. During testnet trials in April 2018, Zilliqa achieved speeds of up to 2,000 transactions per second.
At time of writing (May 2018) the Zilliqa website was quoting test results of 2,488 transactions per second on a testnet of 3,600 nodes divided into 6 shards. And as Zilliqa’s capacity is designed to increase in line with the size of the network, these are certainly promising results.
By way of comparison, Ethereum currently handles roughly 15 transactions per second.
What is ZIL?
ZIL is the ticker symbol of Zilliqa’s native currency token, Zillings. ZIL tokens are used for mining rewards, transaction fees and smart contract execution.
A total of 21 billion ZIL were created, with 6.3 billion distributed during the platform’s January 2018 token generation event. A further 6.3 billion tokens were distributed to investors, Zilliqa Research, the founding team and other supporting organisations, with the remaining 8.4 billion ZIL to be released as mining rewards.
The Zilliqa team
Zilliqa can trace its roots back to 2015, when some of its team members proposed the theory of sharding in an academic paper. The protocol has since been researched and developed through Anquan Capital Pte Ltd, a Singapore-based technology company.
The Zilliqa team is led by CEO Xinshu Dong, who holds a PhD in Computer Science from the National University of Singapore. Most team members have a PhD in computer science or engineering, and the project’s list of advisors includes Kyber Network co-founder Loi Luu, founding partner of FBG Capital Vincent Zhou, and Nicolai Oster, a partner at Bitcoin Suisse AG.
Zilliqa’s January 2018 token sale raised US$22 million in funding.
Zilliqa has secured several important partners, including:
- Insurance Market. Zilliqa joined forces with online insurance broker Insurance Market, Deloitte and regional insurance group FWD to launch Inmediate, a collaborative ecosystem for blockchain-based insurance.
- Noorcoin. The world’s first sharia-compliant utility token partnered with Zilliqa in April 2018 to test Zilliqa’s blockchain protocol for on-chain high-throughput transactions.
- Mindshare. Announced in November 2017, this partnership with the global media agency will involve testing whether Zilliqa’s blockchain protocol can be used to address a number of challenges facing the digital advertising industry.
- Infoteria. In August 2018, Zilliqa partnered with Infoteria, which is an industry leading enterprise software company in Japan. The Zilliqa team plan to use the partnership to push Zilliqa into the market via Infoteria’s ASTERIA middleware product. ASTERIA already has 6.500 users, and will allow clients to take advantage of Zilliqa’s dapps and high-throughput blockchain.
Wallets that support ZIL
Rather than storing your tokens on an exchange, which exposes you to the risk of hacking and theft, most users recommend moving your crypto holdings into a private wallet.
However, following the launch of the Zilliqa mainnet in Q1 2019, these tokens will be exchanged for ZIL tokens issued on the Zilliqa blockchain.
What’s next for Zilliqa: The Zilliqa roadmap
The launch of the mainnet will be a momentous occasion for the Zilliqa team and community. It will be watched with a high level of interest by ZIL holders and a wide range of other crypto projects, as it still remains to be seen whether the platform will be able to deliver its promise of even faster transactions than those already observed.
What to watch out for
Zilliqa’s mainnet is not yet live and until it is, test results and claimed transaction throughput should always be taken with a grain of salt. That said, the project certainly has a lot of promise, and the launch of the mainnet later this year will be a crucial milestone as we wait to find out whether Zilliqa’s potential will be realised.
Then there’s the not insignificant matter of the competition. Ethereum has its own sharding plans and is also working on a number of other improvements to solve scalability bottlenecks, plus it has the advantage of being an established player. Other smart contract platforms like NEO, which claims to be able to process up to 1,000 transactions per second, could also limit Zilliqa’s adoption, while there’s no shortage of other platforms with their own scaling solutions.
From a theoretical standpoint, Zilliqa sounds very promising indeed. However, it’s still early days for the platform, and it remains to be seen whether promising test results will translate into a sufficiently high level of transaction throughput in the real world.
With this in mind, make sure you do your own research before deciding whether or not you should buy any ZIL. The project’s whitepaper, position paper and mega FAQ are all excellent resources to help you understand the technology behind Zilliqa and the features it offers. Use them to gain a deeper understanding of the project and where it could be headed in the future.[/fin_hide]