Dash, a relatively new cryptocurrency, will soon be upgrading to use a 2MB block size limit. The proposal for this change was submitted in 2016 when it received unanimous support from all master nodes on the chain. 2129 votes were cast in favor of it, while only 18 opposed.
While this vote was perceived as a gimmick by many in the industry, the change is finally coming into effect. Dash’s recent 12.2 version update is the first step towards it. Block size upgrades are commonly associated with lower transaction fees and scalability of currency.
Dash, however, is not a cryptocurrency that stands to immediately benefit from an increased block size limit. Not anytime soon, at least, as the number of transactions is still far from the scale of other cryptocurrencies like bitcoin and ether.
Dash will use this move as part of the currency’s march on implementing on-chain scaling, which throws some light on why Dash has decided to implement the change this early.
Interestingly, despite the number of transactions that Bitcoin handles every day, it is infamous for continuing to use a 1MB block size. A hard fork, named SegWit2X, was introduced to double the limit. This proposed fork, however, was met with great opposition from most Bitcoin supporters, causing the idea to be abandoned completely.
Bitcoin’s upcoming Lightning Network is another solution to this problem and does not involve increasing the overall block size limits. Instead, it handles transactions off chain on so-called “payment channels” before writing the net result onto Bitcoin’s blockchain.
Currently, if one wallet initiates multiple separate transactions to another, they would be processed and logged as individual entries to the blockchain. The Lightning Network consolidates each of those exchanges so that they are recorded as a singular entry on the blockchain.
The Lightning Network reduces the effect of those attempting to spam the Bitcoin blockchain with multiple smaller transactions and reduces the load on the network. There is apprehension over this though since all of this would need to happen off-chain.
Some believe that this compromises Bitcoin’s values of decentralization and permanency. Others believe that the Lightning Network is not very different from the existing system, where exchanges move money between users off-chain.
Parallel Evolutions in the Ecosystem
Ethereum, not too far behind, is also implementing the “Raiden Network,” which is functionally similar to Bitcoin’s Lightning Network.
Dash allows miners and master nodes sufficient time to comply with changes of the new update. This is enabled by Dash’s spork feature that can selectively halt any new updates to the currency. The idea of enforcement in the currency, where masternodes are rewarded for their contribution, also works because of this.
With so many recommendations to solve the issues of scaling and high transaction fees, the community remains ambivalent on which solution works best. None of the current propositions have been tested extensively, and it’s entirely possible that they may not turn out to be as expected. However, one thing is definitive. Digital currencies are in dire need of a solution that combats these problems.