Blockchain scalability is thought to be the holy grail and bottleneck of the cryptocurrency world. It mainly refers to how quickly transactions can be made. The time it takes to make a payment with crypto isn’t as quick as with other payment methods.
There are, however, a lot of different ideas about how to get around this. In this piece, we detail the promising developments that could finally get us to near-instant transaction speeds. But first, let’s talk about what transaction speed is. Then, we’ll look at different ways to speed things up.
The Value of Blockchain Scalability
Blockchains are the next big thing. People become unruly when there are just a few million around. How can we expect them to handle billions of people and transactions? Well, that’s why scalability is essential.
It’s important for a blockchain to be able to grow in terms of resources and capabilities so that people will want to use it more. Also, some of the newer blockchains have scalability built-in, but the more popular ones like Bitcoin and Ethereum are adding it overtime to keep their credibility and authority.
What is Crypto Arbitrage?
Arbitrage is when you buy digital coins on one exchange and sell them on another. It allows earning money on the margin. Other strategies need more technical analysis than this one. It’s one of the best ways to make money in the cryptocurrency markets because it’s suitable for markets that move a lot.
Exchanges backed by crypto arbitrage bots
It comes to reason that a crypto arbitrage bot that supports several exchanges would provide you with more possibilities. Bitsgap, for example, supports about 25 businesses, whereas Cryptohopper supports roughly 14.
Bitsgap supports significant exchanges, including Coinbase Pro, Binance, and Kraken.
Cryptohopper supports Bittrex, HitBTC, Bitfinex, and Bitmex. So, if a bot promotes your exchanges, it will influence your choice.
Cryptocurrency Arbitrage Trading Selection
There are many different ways to choose an arbitrage bot for crypto. Most crypto trading arbitrage bots have good features, prices, and strategies. So it’s hard to pick one that fits your needs. Below, we’ll tell you how to pick a crypto arbitrage bot.
Price Justification of Crypto Arbitrage
Pricing is very important when it comes to choosing a bot. Your money should be enough to pay for the arbitrage bot. A good crypto arbitrage bot should be able to show it is worth the money you pay for it. Bitsgap and Cryptohopper, for example, both have higher prices, but both have a lot of value in the features and strategies they have.
What is crypto OTC?
Crypto OTC is the trading of crypto assets between two people. It can be crypto-to-crypto, like trading Bitcoin for Ether, or fiat-to-crypto, like trading dollars for bitcoin (swapping US dollars for Bitcoin and vice versa).
In the same way that all other OTC markets work, there is always a dedicated trading “desk” and another person or group, known as a counterparty. In 2018, a lot of cryptos was traded over the counter.
How does crypto OTC work in real life?
Many people don’t know why over-the-counter (OTC) trading desks like Circle Trade are essential, how they work, or what makes them different from each other. In order to give you essential market information, Circle Research put together an in-depth look at crypto trading desks.
We also looked at their significance, structure, and taxonomy to help you understand them better. As with regular OTC desks in finance, crypto OTC desk transact massive amounts of money in a way that seems to be hidden from the general public view.
What is the purpose of crypto OTC desks?
Because it’s tough to purchase or sell huge sums of cryptocurrency, for example, if you tried to acquire 500 BTC, you would encounter a slew of difficulties. If you wanted to purchase 500 BTC on one exchange, you’d have to acquire it from numerous sellers since it’s unlikely that anybody would be willing to sell them all at once.
Slippage occurs when you can acquire the first piece of security at the current market rate but wind up purchasing the final portion at a much higher price. Your “slippage” increases because no more customers are willing to sell at your preferred price, and your “slippage” increases.
Spreading your 500 BTC purchase over numerous exchanges, purchasing smaller chunks of BTC at the best price available on each exchange can help you prevent slippage. While this may seem like an easy way to make money, it would need you to sign up for many exchanges so that you could execute each individual trade, all while being charged a transaction fee for everyone.
Time to go deeply into details of transaction speed
Transaction speed comes down to the following engineering aspects:
- Block out time
- It can be better if the block time and the block size are both cut down.
Sounds simple, doesn’t it? Besides, it isn’t. We’ll see why:
- If the time it takes to add a block to the blockchain is sped up, it could lead to many orphan blocks.
- An “orphan block” is a block that doesn’t connect to the main blockchain through a parent block. If the block time on the Bitcoin network were cut from 10 minutes to 5 seconds, the tps would go up a lot, but the stability of the blockchain would be thrown off.
- This is what would happen. The whole world will accept blocks if they get enough votes. But there’s a good chance that the block won’t be able to find its parent block and will be thrown away.
- At the moment, there are no “orphan blocks” on the bitcoin network.
Advantages of blockchain storage
Before files can be stored on the blockchain, they must be broken up into shards pieces. Each shard is made twice to ensure that no data is lost if there is an error while transmitting.
This also makes it impossible for other nodes in the network to see the files because they are encrypted with a private key that only the owner can see.
There are nodes that don’t belong to a single organization worldwide. A record of the interactions is kept in the blockchain ledger, which allows the system to confirm and synchronize transactions across all the nodes in the blockchain.
Blockchain data storage is meant to keep these interactions forever, and the data can’t be changed. Blockchain storage could also allow for faster and more customizable storage systems because users can set things like how quickly data can be retrieved and how many copies of data there are to keep things safe.
Conclusion
It will be a good thing for humanity when the blockchain grows and transaction speeds will be faster. A world without euros and dollars sounds like something from a sci-fi movie. Those words: “Blockchain is the next big thing,” would be true on that day. The way we think about trade would be completely different. The company that comes up with the first scalable solution will always be discussed and praised in computer science history.
