Content
- The Categories of Scaling
- Vertical Scaling
- Horizontal Scaling
- Comparing Horizontal Scaling and Vertical Scaling
- Achieving Horizontal Scaling through Parallelization of Transactions
- Conclusion
- About Zerocap
- DISCLAIMER
- FAQs
- What is the difference between horizontal scaling and vertical scaling in blockchain technology
- What is the scalability trilemma in blockchain technology?
- How does the Sui network achieve horizontal scaling?
- What are Tusk and Narwhal in the context of horizontal scaling?
- Why is horizontal scaling considered superior to vertical scaling in blockchain technology?
26 Apr, 23
The Supremacy of Horizontal Scaling over Vertical Scaling
- The Categories of Scaling
- Vertical Scaling
- Horizontal Scaling
- Comparing Horizontal Scaling and Vertical Scaling
- Achieving Horizontal Scaling through Parallelization of Transactions
- Conclusion
- About Zerocap
- DISCLAIMER
- FAQs
- What is the difference between horizontal scaling and vertical scaling in blockchain technology
- What is the scalability trilemma in blockchain technology?
- How does the Sui network achieve horizontal scaling?
- What are Tusk and Narwhal in the context of horizontal scaling?
- Why is horizontal scaling considered superior to vertical scaling in blockchain technology?
This article was written in partnership with Zokyo
The labyrinthine nature of scaling in the blockchain space reveals new ways to strengthen networks without compromising their core principles at every turn. These systems’ primary feature, decentralization, necessitates a careful balance between performance, security, and growth. There are at present two main methods of scaling: vertical scaling and horizontal scaling. To accomplish efficient and successful horizontal scalability, several blockchains, including Sui, make use of parallelization as it applies to transactions. This article decodes the blockchain scaling issues and examines the potential of this dynamic technology.
The Categories of Scaling
Unlike traditional centralized companies, which store user and participant data on a single server, decentralized networks act as distributed ledgers. Rather than having a single point of failure, blockchains leverage a plethora of nodes to record the history of transactions. However, though this eliminates the existence of a single point of failure, it nonetheless creates an additional workload when considering the sum of contributions made by each node. Accordingly, in some situations, this added weight hinders the capacity for a distributed network to scale as more nodes participating in validating the chain correspond to more cumulative work for the blockchain.
In response, certain chains have been optimized to scale in unique ways. Most commonly, blockchains scale vertically, relying on third-party solutions building on top of them. However, as the cryptography and coding languages underpinning blockchains have evolved, methods have also been developed to enable blockchains to scale horizontally. In these cases, rather than validators slowing the network down, they speed it up and increase the chain’s throughput.
Vertical Scaling
Vertical scaling relates to the process of increasing the computational power of a single server by adding more resources such as RAM, CPU, or storage in order to scale upwards. With respect to blockchains, vertical scaling is the process of increasing the capacity of a blockchain network to handle more transactions per second (tps). This is accomplished by raising the barriers to entry for nodes by increasing their requirements to benefit the overall network. Typically, vertical scaling comes at the expense of the parties supporting the functionality of the blockchain.
Ethereum is one such example of a blockchain that scales vertically. Designed to be a permissionless and highly decentralized network, transactions are processed by nodes distributed across the chain. Hence, the more nodes validate Ethereum, the more decentralized and secure it becomes. However, this elevated level of decentralization comes with the cost of scalability. This dynamic interplay is known as the scalability trilemma.
To resolve this, the Ethereum blockchain relies on layer 2 solutions, where the network is built on top of the base layer to scale. Rollups work by migrating the execution layer off of layer 1 (Ethereum) and onto layer 2. These layer 2’s facilitate a substantial number of transactions at a lower fee and increase speed by periodically batching transactions into a rollup. In this process, the network will compress a multitude of transactions into a batch that is posted onto the underlying blockchain, Ethereum, as a single transaction in a block. Rollups increase the scalability of Ethereum and other layer 1 networks by reducing the number of transactions that must be executed on the base layer. Although it might appear that this example of vertical scaling is effective, abstracting the execution layer onto a rollup causes layer 2 to sacrifice the benefits of a diverse validator set underpinning the base layer, namely, decentralization and security. This is a key flaw in vertical scaling models.
Horizontal Scaling
Horizontal scaling is the scaling category wherein adding more nodes to a network increases its capacity and performance. Unlike vertical scaling, where the computational power of a single node is increased, horizontal scaling distributes the load across multiple nodes, allowing the network to handle larger workloads and provide improved performance.
Horizontal scaling is made possible by the principles of distributed computing. In a distributed system, each node in the network has its own resources and runs its own copy of the software. The nodes communicate with each other and work together to complete computational tasks as opposed to striving to complete tasks individually. This allows the system to scale horizontally by simply adding more nodes to the network as the demand for processing power and storage increases.
One example of horizontal scaling outside of the blockchain world is cloud computing. Many cloud computing platforms use horizontal scaling to provide scalable and highly available services. For instance, Amazon Web Services (AWS) uses auto-scaling groups to dynamically add or remove computing resources based on demand. This allows AWS to provide highly scalable and available services, even during periods of high demand.
Of course, this example pertains to centralized ecosystems. Within the blockchain world, Sui has built and is utilizing a parallel execution engine to scale horizontally. This engine eliminates scalability bottlenecks that have previously been inherent to blockchains by splitting up transaction types, resulting in a multi-lane approach where certain transactions are executed in parallel. Notably, some transactions, such as the transfer of value within different ecosystems, can be executed in parallel, given that one transaction will not impact the other. On the other hand, Sui notes that transactions are not mutually exclusive from all other transactions; these are executed sequentially. An example of this would be a trade on a decentralized exchange (DEX). The first transaction, t1, will interact with the smart contract represented by a liquidity pool, impacting the price for subsequent trades. This means that the second transaction, t2, will have to be executed after t1.
In this way, Sui represents transactions as batches when transactions must be ordered sequentially or as independent objects that can be executed in parallel. This enables the network to scale horizontally as additional validators contribute more computational power, which goes toward increasing the ability of the blockchain to execute more transactions at once.
Comparing Horizontal Scaling and Vertical Scaling
When comparing horizontal and vertical scaling, it is essential to delve into the technical underpinnings and architecture of these two approaches. Horizontal scaling involves increasing a system’s capacity by adding new nodes or resources, effectively distributing the workload across multiple nodes that can operate in parallel. Key components in horizontally scaled systems include load balancers and distributed databases. Load balancers are responsible for distributing incoming requests evenly across multiple nodes, ensuring that no single node becomes a bottleneck. They monitor the health and performance of nodes, distributing requests accordingly. Distributed databases, on the other hand, store and manage data across multiple nodes, allowing for concurrent read and write operations, resulting in higher throughput and fault tolerance.
Conversely, vertical scaling involves augmenting a system’s capacity by adding more resources, such as a CPU, RAM, or storage, to a single node. Vertical scaling solutions like sharding and rollups concentrate on optimizing the performance of individual nodes by enhancing their processing power and memory capabilities. Sharding divides the blockchain into smaller segments or shards, each capable of processing transactions in parallel. Rollups, on the other hand, aim to reduce the amount of data processed on-chain by each individual validator through bundling transactions and verifying them off-chain.
Sui has adopted a cautious and judicious scaling strategy by opting for horizontal scaling. This is achieved through the implementation of a parallel execution engine, which, as explained below, leverages parallelism and concurrency to facilitate the simultaneous processing of transactions. Validators within the Sui network are assigned distinct transactions, allowing them to work simultaneously, thereby increasing the throughput capacity of the network as more validators are incorporated.
Ethereum, in contrast, has been primarily focused on vertical scaling solutions, such as sharding and rollups, to boost its transaction throughput capacity. While these solutions may offer some performance improvements, they come with inherent challenges and drawbacks. Rollups, despite their potential to increase Ethereum’s transaction throughput capacity and alleviate the load on the blockchain, are not without possible technical pitfalls and fallacies. A significant concern with rollups is their reliance on off-chain processing, which could compromise the system’s security and decentralization. Furthermore, rollups depend on trusted third parties for off-chain transaction verification, which introduces additional centralization considerations and undermines the trustless nature of the blockchain.
Achieving Horizontal Scaling through Parallelization of Transactions
Horizontal scaling, akin to a well-orchestrated ensemble, amplifies a system’s capacity by adding more nodes to the network, ultimately boosting processing power and throughput capacity. However, the crescendo of nodes alone does not guarantee an increase in the system’s capacity to handle more transactions. The key to unlocking this potential lies in the ability to process transactions in parallel.
Parallelized transactions are akin to individual musical notes that can be played simultaneously without clashing, as they do not require dependent ordering to be executed. Sui masterfully employs parallelized transactions to achieve horizontal scaling by orchestrating this harmonious performance. Its consensus mechanism, the Byzantine Consistent Broadcast, serves as the conductor, facilitating transaction processing without necessitating strict ordering or causal relationships.
Tusk and Narwhal are two protocols built on Sui’s stage that exemplify how horizontal scaling can be achieved through parallelized transactions. Tusk is a decentralized payment channel protocol, much like a choir of independent voices, allowing transactions to be processed in parallel across multiple payment channels. In contrast, Narwhal is a decentralized order book management protocol, akin to an ensemble of musicians playing different instruments, enabling multiple traders to execute trades simultaneously without interference.
Both Tusk and Narwhal rely on Sui’s parallelized transaction processing capabilities to achieve horizontal scaling. Sui, as the skillful maestro, empowers these protocols to perform in unison, enabling transactions to be processed independently and in parallel. This harmonious collaboration provides a scalable foundation for these protocols to operate and grow, showcasing the effectiveness of parallelization in achieving horizontal scaling.
Conclusion
Ultimately, despite vertical scaling blockchains dominating the market, at a technical level, the horizontal scaling solution is substantially superior. The supremacy of horizontal scaling over vertical scaling can be analogized to a grocery store with no self-service checkouts. Each customer, irrespective of the number of items they are purchasing, will be waiting in the same line. Simply adding in more checkouts managed by an individual, generally purposed for customers with many items, will add to the requirements of the grocery shop and have minimal impacts on its efficiency; the wait time for those with few items and copious amounts of items will be the same. However, adding in self-service checkout lanes, representing horizontal scaling, both distribute the workload and reduces the wait time for both groups, allowing the grocery store to become efficient and effective.
Nevertheless, the future is not set. It is likely that future innovations will be made to scale vertically, potentially to the extent that this approach to scaling becomes superior to alternatives. Presently, scaling horizontally with each node contributing to the network and subsequently increasing throughput is the most effective solution to make blockchains more efficient and capable of onboarding more users.
About Zerocap
Zerocap provides digital asset investment and digital asset custodial services to forward-thinking investors and institutions globally. For frictionless access to digital assets with industry-leading security, contact our team at [email protected] or visit our website www.zerocap.com
DISCLAIMER
Zerocap Pty Ltd carries out regulated and unregulated activities.
Spot crypto-asset services and products offered by Zerocap are not regulated by ASIC. Zerocap Pty Ltd is registered with AUSTRAC as a DCE (digital currency exchange) service provider (DCE100635539-001).
Regulated services and products include structured products (derivatives) and funds (managed investment schemes) are available to Wholesale Clients only as per Sections 761GA and 708(10) of the Corporations Act 2001 (Cth) (Sophisticated/Wholesale Client). To serve these products, Zerocap Pty Ltd is a Corporate Authorised Representative (CAR: 001289130) of AFSL 340799
All material in this website is intended for illustrative purposes and general information only. It does not constitute financial advice nor does it take into account your investment objectives, financial situation or particular needs. You should consider the information in light of your objectives, financial situation and needs before making any decision about whether to acquire or dispose of any digital asset. Investments in digital assets can be risky and you may lose your investment. Past performance is no indication of future performance.
FAQs
What is the difference between horizontal scaling and vertical scaling in blockchain technology
Horizontal scaling and vertical scaling are two different approaches to increasing the capacity of a blockchain network. Vertical scaling involves increasing the computational power of a single server or node by adding more resources such as RAM, CPU, or storage. This is often achieved by implementing third-party solutions like sharding and rollups. On the other hand, horizontal scaling involves adding more nodes to a network, distributing the workload across multiple nodes that can operate in parallel. This approach leverages principles of distributed computing and is exemplified by blockchain platforms like Sui, which uses a parallel execution engine to process transactions.
What is the scalability trilemma in blockchain technology?
The scalability trilemma refers to the challenge of achieving decentralization, security, and scalability simultaneously in a blockchain system. It’s a common issue in blockchain development where improving one aspect often leads to compromises in the others. For instance, increasing scalability through vertical scaling solutions like rollups can potentially compromise the system’s security and decentralization.
How does the Sui network achieve horizontal scaling?
The Sui network achieves horizontal scaling through the implementation of a parallel execution engine. This engine allows transactions to be processed simultaneously, increasing the throughput capacity of the network as more validators are incorporated. Sui’s consensus mechanism, the Byzantine Consistent Broadcast, facilitates transaction processing without necessitating strict ordering or causal relationships, enabling the network to scale horizontally.
What are Tusk and Narwhal in the context of horizontal scaling?
Tusk and Narwhal are two protocols built on the Sui network that exemplify how horizontal scaling can be achieved through parallelized transactions. Tusk is a decentralized payment channel protocol that allows transactions to be processed in parallel across multiple payment channels. Narwhal is a decentralized order book management protocol that enables multiple traders to execute trades simultaneously without interference. Both protocols rely on Sui’s parallelized transaction processing capabilities to achieve horizontal scaling.
Why is horizontal scaling considered superior to vertical scaling in blockchain technology?
Horizontal scaling is considered superior to vertical scaling because it allows for increased throughput capacity without compromising the decentralization and security of the network. By adding more nodes to the network and processing transactions in parallel, horizontal scaling can effectively distribute the workload and handle larger workloads. In contrast, vertical scaling solutions like rollups, while they can increase transaction throughput capacity, often rely on off-chain processing and trusted third parties, which can compromise the system’s security and decentralization.
Like this article? Share
Latest Insights
Weekly Crypto Market Wrap: 9th December 2024
Zerocap is a market-leading digital asset firm, providing trading, liquidity and custody to forward-thinking institutions and investors globally. To learn more, contact the team at
Weekly Crypto Market Wrap: 2nd December 2024
Zerocap is a market-leading digital asset firm, providing trading, liquidity and custody to forward-thinking institutions and investors globally. To learn more, contact the team at
Zerocap Shines at Blockies & Australian Crypto Convention
This past weekend marked a significant milestone for Zerocap as we participated in two of Australia’s premier crypto events: the prestigious Blockies Awards and the
Receive Our Insights
Subscribe to receive our publications in newsletter format — the best way to stay informed about crypto asset market trends and topics.