How Crypto Is Stepping Into the Land Down Under

On Sept. 26, Australia’s National Science Agency (CSIRO), an independent Australian federal government agency responsible for scientific research, developed a blockchain network called Red Belly with the University of Sydney. They successfully conducted a pilot test on the Amazon Web Services (AWS) global cloud infrastructure, processing more than 40,000 transactions per second.

At 40,000 tx/second, Red Belly is able to process information on an immutable network at a capacity that is 6,666 times larger than the Bitcoin network and about 1,600 times bigger than the Ethereum blockchain network.

Ethereum vs. Visa

An Ethereum researcher with an online alias CPereez19 calculated the transaction per second capacity of Ethereum to be around 25.346 tx/second, evaluating the block gas limit and transaction cost of the Ethereum network:

“The block gas limit [of Ethereum] is 7,999,992 . Transaction costs 21,000 gas (let’s assume nothing else is attached). That’s around 380 transactions per block. With a block time of around 15.03 seconds, as ETH Stats shows, this gives us approximately: 25.346 tx/s.”

The 40,000 tx/second capacity of the Red Belly Blockchain surpassed the transaction capacity of the Visa network, which is estimated to be 24,000 tx/second. VisaNet, the base payment network for most of the world’s credit card payments and digital transactions, processes around 150 million transactions on a daily basis.

Although the transaction capacity of Visa is significantly larger than Ethereum — by more than 1,600-fold — the total value of payments processed by the two networks on a daily basis do not present that big of a discrepancy.

At its peak on January 4, Ethereum processed around 1 million transactions. Currently, according to Etherscan, Ethereum is processing about 500,000 transactions per day, which means Visa is processing a volume that is three-hundredfold larger than that of Ethereum. Even though the transaction capacity of Ethereum is significantly smaller than Visa, the relatively high daily transaction volume of the network demonstrates fairly high user activity.

Source: Etherscan.io

Ethereum is not that far off from achieving the transaction capacity of Visa, which is highly impressive for a completely decentralized and peer-to-peer (p2p) blockchain network. Previously, Ethereum co-creator Vitalik Buterin stated that the Ethereum network could potentially achieve 1 million transactions per second with second-layer scaling solutions like sharding and plasma.

On public blockchain networks, scaling solutions relieve pressure on the mainnet by processing information outside of the main infrastructure. For instance, on Ethereum, sharding and plasma can process transactions outside of the mainnet to increase the capacity of the network in handling information.

“The reason I think layer one and layer two [networks] are complementary is because ultimately, if you look at the math, the scalability gains from the layer one improvements and layer two improvements do ultimately multiply with each other. If you have a sharding solution, the sharding solution itself might increase the scalability of Ethereum by a factor of 100, or eventually even more. But then, if you do Plasma on top of the scalability solution, then what that means is, you’re not just doing 100 times of the amount of activity but you are doing 100 times the amount of entrances, the amount of exits and despite resolutions.”

Red Belly vs. centralized blockchains

Permissioned ledger projects initiated by large-scale technology and financial institutions — such as Intel and JPMorgan — have demonstrated a massive transaction capacity of over 100,000 transactions per second and an ability to process any size of information on demand.

However, both Sawtooth Lake Blockchain of Intel and JPMorgan’s Quorum are enterprise-focused blockchain networks that maximize transaction capacity within a closed ecosystem. Hence, by definition, most of these blockchain networks developed by conglomerates are not decentralized or peer-to-peer. JPMorgan described its blockchain as a high throughput, permissioned ledger for private transactions:

“Quorum is ideal for any application requiring high speed and high throughput processing of private transactions within a permissioned group of known participants. Quorum addresses specific challenges to blockchain technology adoption within the financial industry, and beyond.”

Instead, researchers at CSIRO and University of Sydney emphasized that the Red Belly Blockchain was created with attention to decentralization. Although the network is still in a pilot testing phase, its development team demonstrated efforts to test the blockchain in a decentralized environment by placing 1,000 virtual machines across 18 geographic regions.

In an actual mainnet setting, these machines replaced with nodes, thus the Red Belly Blockchain would work structurally similarly to Bitcoin, Ethereum and other public blockchain…

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