The eCash mission is clear: create a censorship resistant payment network that can handle 5 million transactions per second, while also remaining cheap, fast, and reliable to use and helping to spread economic freedom throughout the world.
Now the question is, how does XEC plan to achieve this? With a well thought out plan, of course.
Unlike other projects that tout lofty goals but seem to have no strategy on how to achieve those goals, you will find right there on the eCash website a robust roadmap that lays out a detailed three-pronged approach to tackle the various challenges they are working to overcome. The three areas of focus are:
- Scaling transaction throughput.
- Improving the payment experience.
- Extending the protocol.
Within each category are various proposals either currently being worked on, or planned for the future. Each item basically represents one step closer to reaching the finish line.
But keep in mind this is a marathon, not a sprint. It will take a lot of iteration through trial and error while making “constant incremental improvements” to accomplish the mission. Having said that, I am confident the XEC project has the right plan, the right team, and the right incentives to deliver on all its promises.
Scaling transaction throughput
It’s no secret that blockchains don’t scale. At least not easily. The reason for this is because of the enormous amount of data that must be stored and transmitted across these networks of computers distributed around the world.
To give you some perspective, the XEC network can currently handle approximately 100 transactions per second. Compare this to BTC’s 7 txs/second, Ethereum’s 200 txs/second, or Visa and its 1700 txs/second.
Needless to say, the only way to have a blockchain that can handle 5 million transactions per second is by making everything faster. Much faster.
Nodes will need to be able to quickly download and validate blocks and transactions or the network won’t properly function. This is why small blockers argued against raising the block size. Obviously a 1 megabyte block full of transactions will be much easier and faster to process than a 1 terabyte block full of transactions. And if nodes can’t quickly come to consensus on the state of the network, then payments will fail and the network will be unsafe to use.
While some of this increase in speed is expected to come from improvements in hardware and broadband technology, there must also be improvements in the software itself. This is where the items on the roadmap such as QUIC, Merklix, and Faster Block Propagation (i.e. Graphene) come into play. Without getting into any technical details, these proposals either involve faster block processing or data compression technologies.
Another way of putting it would be these initiatives either decrease the amount of time it takes to send and receive the data, or reduce the amount of data that needs to be transmitted. This way the network will be able to safely increase the block size and the amount of transactions that can be processed without also increasing network latency.
The key benefit of these initiatives is that they will improve in the area of parallelization. Parallelization is when many calculations or processes can be carried out simultaneously. This enables computers to divide one large job into many smaller ones that can be performed at the same time, because as stated on the website, “Mass-parallelization is necessary to achieve mankind scale.”
Improving the payment experience
While scaling usually gets all the headlines, if you think about it, it all comes down to improving the payment experience, or improving usability.
Who wants to go into a store and have to wait ten minutes for a block to get confirmed in order to walk out with their purchases? Or depend on a network that can get 51% attacked at any time or risk being double-spent and defrauded of your merchandise?
While increasing transaction throughput is a huge part of improving the payment experience, there are other areas of usability that have nothing to do with scaling.
Examples of potential improvements to the payment experience unrelated to scaling include: 1) increasing network security 2) enabling instant transactions 3) improving privacy 4) maintaining low fees.
The first two items will be addressed by layering the Avalanche consensus algorithm on top of the already existing Proof of Work (PoW) algorithm eCash is built on. By combining the two, it will give XEC the benefit of both PoW and Proof of Stake (PoS).
Avalanche will also make it virtually impossible to 51% attack or double-spend the network. The Avalanche implementation will happen in two phases: post-consensus, then pre-consensus. Post-consensus will make it so a malicious actor can’t 51% attack the network no matter how much hashpower they control. This has the potential to make XEC even more secure than BTC itself. Because in order to attack the network, not only would you need enough hashpower to overpower the honest miners, but also enough XEC to run enough Avalanche nodes to overpower all honest nodes.
The other benefit of Avalanche is that the network will be able to determine transaction finality within a matter of seconds. This would mean no more needing to wait for a confirmation to be confident your funds have been delivered while also having the potential to open up all kinds of new use cases besides just improving the payment experience.
In addition to fast and reliable payments, the XEC roadmap also includes improving network privacy and making sure transaction fees will always be low so that everyone can participate in the global economy. These will be addressed in future implementations with the introduction of zero-knowledge subchains and fractional satoshis.
Extending the protocol
What does it mean to extend the protocol? For me it means expanding what the eCash network is capable of doing. In addition to being an amazing payment network, imagine if XEC could do so much more. For example, we’ve already seen that it can support an eToken economy on top of the network. But through the implementation of more advanced Opcodes, a new transaction format, and an EVM (Ethereum Virtual Machine) compatible subchain, there is nothing to prevent eCash from one day having the same smart contract capabilities touted by other platforms and a protocol that “makes future improvements less disruptive, providing a solid base for businesses and developers to build on.”
Make no mistake there’s still a lot of technological progress that needs to be made, but I hope that this article has demonstrated at a high level that the team at Bitcoin ABC have put together a solid roadmap worth seeing through to the end.
Not only that but with the new coinbase rule, the developers working on the eCash project finally have the proper funding and the right incentives to make XEC as valuable as possible.
In Part 7, we will explore the ramifications of New Coinbase Rule and the upcoming Global Network Council.