Telos EVM: A solution to Blockchain Scalability Issues

By Edward Moon | Analysis From Moon | 21 Mar 2022


January 3rd, 2009, the world witnessed a wonder with Bitcoin making its debut as the first cryptocurrency. About three months before the launch, pseudonymous creator Satoshi Nakamoto released a white paper that detailed the Bitcoin cryptocurrency and how it works. It is to be a technology that will revolutionize the financial industry as we know it, to eliminate third parties in our financial transactions. This cryptocurrency was built on blockchain technology. 

This invention offers an exquisite solution to most of the problems faced by the traditional finance system - a decentralized financial system that gives power to the users. However, as the world started warming to the idea of an alternate currency, several issues with the bitcoin blockchain technology surfaced. Its network has limited functionality, lacks interoperability, and is challenging to scale.

Scalability is an essential factor for cryptocurrency to be fully adopted as a replacement for fiat currency. The scalability issue with the bitcoin blockchain stems from the limited size and frequency of the blocks. Initially, it takes about 10 minutes to create a block, each with a size limit of 1 megabyte. This size enables it to process between 3 - 7 transactions per second. It dwarfs in comparison to Visa, which can handle 1700 transactions per second. This is a significant problem for a technology that aims for massive adoption. 

A solution? Or so we thought

To complement the bitcoin network and improve on some of its shortfalls, another blockchain emerged. Ethereum developers harnessed the power of blockchain technology for other valuable purposes. Equipping users with the ability to make smart contracts using the EVM made the deployment of dApps possible and gave birth to new digital items like NFTs.

This blockchain made the dream of Decentralized Finance (DeFi) a reality. Other blockchains started to emerge with Ethereum's groundbreaking success, each offering valuable functionalities to users. 

However, this second-generation improvement to bitcoin's first-generation blockchain seemed not to pay much attention to scalability as well. It could only handle 15 transactions per second which is not much of an improvement to bitcoin's seven transactions per second. Also, this Blockchain still uses the PoW consensus for validating transactions. This is known to take quite some time, resulting in very low throughput rates.

Lately, the Ethereum Network has been plagued with severe congestion issues, causing the rise in gas fees per transaction. With the current boom in DeFi adoption, the Ethereum network gets slower as each new user joins the ecosystem. However, upgrades have been implemented on the Blockchain with more on the way. There is yet to be a viable solution to scalability issues currently facing the Ethereum Network. 

The road forward

The Ethereum network has promised an upgrade from the Proof of Work (PoW) consensus to the Proof of Stake (PoS) consensus. This will make the processing of transactions a lot faster, thereby lessening congestion on the network. Even with this, there is no guarantee that this switch will solve the blockchain's scalability issues. Not to mention this transition is still in the distant future.

Third-generation blockchains have risen to the challenge of scalability, providing viable solutions to problems facing the first two generations of blockchain. Some new blockchains have emerged, each offering its peculiar solutions with other added features.

These new blockchains have proven beyond measure their capabilities of solving scalability issues common to blockchains of the previous generation. They are not only interoperable but are also faster and more cost-efficient.

Now, the DeFi dream can be sustained on more capable blockchains. This does not eliminate Ethereum as a big player in the DeFi ecosystem. However, its authority in the said field would certainly be challenged.

Finally, we can breathe

With blockchains like Cardano, Polkadot and Telos, we have viable solutions to the scalability problem and other issues plaguing previous blockchain generations. Each third-generation blockchain offers exciting features that make them a go-to option for DeFi by many. 

Cardano uses its stablecoin Ardana as a means to expand into DeFi. The blockchain features functionalities that give room for a stable decentralized economy. It also uses the PoS to ensure transactions are processed quickly while also rewarding its network users.

Telos is a big game-changer for the blockchain community. It has proven itself by solving most of the major problems facing the Ethereum blockchain. This is a Layer 1 blockchain that provides users with several features that make it the ideal go-to blockchain for dApps, NFTs, DeFi protocols, etc. The blockchain was designed to solve issues regarding the Ethereum blockchain. It uses the Telos EVM, a powerful solution to congestion, scalability, and safety issues currently faced by the Ethereum blockchain. Now, users can perform transactions faster at much cheaper gas fees.

It does more than offer scalability. The Telos EVM also helps the environment by reducing energy consumption by a fair margin. The PoW consensus used by blockchains like Ethereum consumes much energy due to the long time required to validate transactions. On the other hand, the Telos EVM uses the PoS consensus, which takes much less energy and very little time to validate each block in the Blockchain.

Telos is ready for massive adoption, offering excellent features via its Telos EVM. It is a viable solution to issues currently facing the blockchain ecosystem.

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Edward Moon
Edward Moon

Crypto trader and analyst.


Analysis From Moon
Analysis From Moon

Analysis From Moon

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