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Another Method for Miners to Get Their Data Into a Blockchain.
By Ivan Assenov
It’s been 13 years since Bitcoin first emerged as a disruption in the financial industry. It started as a basement exercise for a few enthusiasts who wanted to change the way people used money. It has certainly changed it, but is it for the better? People are all excited about the “coin,” but they have forgotten about the “bit.”
Now, Bitcoin billionaires have embraced the greed and flaunt their wealth. People are scrambling to get their piece of the pie without actually understanding what Bitcoin and other cryptocurrencies can do.
Or maybe it’s human nature to always focus on the quick ROI, hijack the technology, and push it to a deadly spiral.
Countless “gurus” invade our professional network — who show up at conference after conference, preaching the good word of blockchain technology without understanding what it means.
And yet, with all the blockchains in the world, the market isn’t that big. If we combined all major blockchains by size, we would probably be able to fit them on a single server with a few hard drives. Which makes you wonder how something so relatively small could be so disruptive.
Before we answer that question and provide a solution to the problem of bitcoin’s inability to scale, let’s go back to the very beginning of Bitcoin history. Look at an e-mail Hal Finney, one of the first Bitcoin users, sent to Satoshi Nakamoto, the (reputed) creator of Bitcoin.
Some of the discussion and concern over performance may relate to the eventual size of the P2P node network. How large do you envision it becoming? Tens of nodes? Thousands? Millions?
And for clients, do you think this could scale to use close to 100% of world financial transactions? Or would you see it as primarily being used for some “core” subset of transactions with special requirements, with other transactions using a different payment system based on Bitcoin?
Even in 2008, people were asking the same question we’re hearing 14 years later: Can Bitcoin technology scale?
In 2022, we have the answer to that question. In the last several years, most of the Bitcoin world decided that Layer 1 blockchain is not scalable. So instead, they moved to Layer 2 solutions, where scaling is possible by cutting corners or through validation sampling and changing the proof itself.
The results have been somewhat mediocre. For example, only one blockchain, in particular, could publish 1800 transactions per second (TPS), while others can only manage 10–200 TPS.
At FYX Gaming, we took a different approach: We stuck with the original Bitcoin protocol and worked to scale on Layer 1.
To solve the puzzle, we looked at what was available at the time — August 2021 — and we realized that how we pass data to miners is a core component of the scaling initiative.
There were two main approaches to dealing with proof of work (PoW) on the Bitcoin protocol. One, send data using a peer-to-peer network of P2P nodes. Or two, send data to a miner using an entry point on their system but have no understanding of how the data propagates to the nodes or how to use the short push of data to their nodes by directly bypassing additional layers. Both approaches are solid and don’t compromise the Bitcoin protocol.
Both approaches can be streamlined and optimized. For example, a data originator can broadcast directly to a node, and that node can notify other nodes. Or the network itself can be optimized for low latency, and so on.
The final result will be a somewhat scalable project where a chain can process up to 20 million transactions per day. Of course, that’s ten times more than Ethereum can process, but even on a grand scale, it’s still nothing if these transactions are dependent on each other.
How Does FYX Gaming Scale?
We believe we need to add other mechanisms for miners to fetch data from transaction originators into the blockchain. To start, we pluck the low-hanging fruit: From data hubs where the data originated or is aggregated, miners can grab the data using an open-source protocol. The data is in the exact order it should be processed, and all the transactions are placed to be processed by miners in the correct order as they are created so dependencies are built in the list itself.
The node itself doesn’t care where the data comes from because validation happens on the data itself, now the way it entered the node.
We’ve heard arguments about why miners should get their data from XYZ hub or gather their data with a particular method. But most Bitcoin miners are already big and known entities. (Some are even listed on the stock exchange.) Most of them are from China, where they have very few static IP addresses, and the people at the top of the network can control who has them.
So if these big miners control things like static IP addresses, why not create big data centers that aggregate data transactions ready to be pulled in by the miners in exchange for more computing speed?
We did precisely that. We created a patent that solidified our approach and proved that we could scale it. With this process, we can process double digits millions of transactions with just a few people.
We tested our theory when a tiny miner entity used 2% of the network’s hash power to mine millions of transactions in a single day using our client’s open-source code.
Additionally, our transactions are possibly some of the most complicated transaction types on a blockchain today. The complexity of our transaction type is because they have deep relationships in tens of thousands or even hundreds of thousands of dependencies.
In short, we learned that big data centers that originate or aggregate transactions are the best way for blockchain technology to scale. We have already created one available for the blockchain community to use and adapt.
Whether you’re in financial technology, healthcare, manufacturing, or gaming, our approach to blockchain technology makes it possible for you to process fast, secure, and reliable transactions.