On the public and private fronts, these companies are innovating at breakneck speed to solve the blockchain trilemma which includes: solving human problems without compromising on decentralization, scalability and security.
Most implementations of blockchain are sloppy in one or more of those three areas. Ethereum has been in crypto space news the most for being unable to scale as quickly as the demand wants it to. Also for the huge gas fees that result when so many users battle for whose transaction should be processed first. Rival cryptocurrencies projects have risen to this challenge, attracting developers and growing rapidly, including NEAR and Avalanche, each with their different approaches to scaling.
NEAR Blockchain Vs Avalanche Network
NEAR using sharding, Avalanche using subnets and a probabilistic technique. Let’s dig into what those worlds look like, how adoption is going, and what the future holds for NEAR, compared to Avalanche.
From inception, NEAR set out to onboard billions of people into the crypto space, says co-Founder Illia Polosukhin in a recent Twitter space discussion.
This was Ethereum’s goal as well. To bring every device and machine you use onto the blockchain in order to build a new internet that is free of censorship. Ethereum faces a bottleneck: the users have begun to rush in but the network is too slow and too costly to serve them all. NEAR plans to carry billions of people and solve this issue using sharding.
What is sharding?
Sharding is simply breaking up the ledger spreadsheet that contains transactions and instructions, and placing them on different servers, with a routing system on the application layer that directs you to your data on whichever server it sits on. Having different portions of the record on different servers reduces latency, increases the speed of transactions because the workload is now spread into partitions.
For instance, the Ethereum ledger is almost 1 Terabyte in size now. Compare that with the storage space of most computers and you see why it gets more and more restricting as to who can be a node to process transactions on the Ethereum blockchain.
In a blockchain, each node that processes transactions must have critical information from this ledger such as transaction records and account balances. That is part of what it means that blockchains are distributed ledger systems. This has usually meant having the entire network on each node. Sharding asks if this is necessary, and rather has nodes carrying the partition of data they need to access.
Sharding is about the most complex of all the scaling solutions, and the Ethereum network itself intends to implement it as part of their roadmap after other scaling solutions like layer 2s have been set up at a time when it would be least disruptive to the system.
NEAR on the other hand is infusing it early on. Sharded systems are prone to hacks. A shard can be attacked, one shard could attack another, information could be lost, which is trouble for a blockchain, a system where records should be unerasable. The process is mostly still theoretical and hasn’t been stress-tested yet.
NEAR, however, saw tremendous growth in 2021, announcing an $800 million grant for developers willing to build with them, and almost tripling their number of full-time developers. This is a real indicator of where the traction could be in future because it is the solution apps built by developers that solve people’s problems and end up onboarding them into the crypto space, hence, millions and billions of users. According to co-Founder Illia Polosukhin, their drive has been fuelled by the question, “how do we create a developer experience that a regular engineer can pick up and build an app on day one?” which is why Rust, a more friendly language than Ethereum’s Solidity, was used in programming NEAR, and also why NEAR chose to support Typescript.
Emin Gün SIrer agrees that “chains that will do well will be the ones that can absorb huge user base growth.” However, they take a different approach: subnets.
A subnet is like a town within a state. Ordinarily, if there were no roads within a town, and the villages within it are separated by a river or by an expanse of thick vegetation, people in both villages could live for years without acknowledging each other. They might not even know that the other village exists. If they had a major road linking them to the state capital, they would get all their supplies and do their trade with the state capital. However, if the state came and built a bridge over the river, cleared the vegetation and built a road linking the villages, they can trade with each other, and suddenly they don’t need to go to the state capital as much anymore. Creating a subnet is building that road, and creating a new separate instance of the blockchain that communicates with the old blockchain. The subnetwork only communicates with the old blockchain once in a while, and the majority of transactions happen within the subnet and happen much faster since the distance for data to travel is much smaller. You can already go up on the Avalanche network and set up a virtual machine or a subnetwork, including ones compatible with Ethereum.
Avalanche couples this application of subnetworks with their probabilistic technique. The probabilistic technique is a fancy name for how their system makes snap judgments by observing what the majority of validators are ‘saying’ and verifying transactions based on that instead of checking all validators one by one before adding a transaction to the ledger. Amped up so, Avalanche runs between 1,000 and 4,500 transactions per second, compared with Ethereum’s 15-30 tps.
The theory is that more and more subnets can be created endlessly, and so the potential for scaling and catering to billions of users is limitless, but this is all still science and theory yet to be tested. The hammer of engineering has not been applied on Avalanche’s network as much as on Ethereum, for instance, and Gün himself says users should definitely expect adjustments as time goes on.
Developers are hacking away on both NEAR and Avalanche, and we are set to see solutions appearing on both blockchains in the close future. They are definitely blockchains to watch out for in 2022