Scalability is the number one problem facing Blockchain today.
And it’s a technically challenging problem, one with no easy solution that’s prevented blockchain technology from reaching real-world adoption.
But this problem may, for the first time, have a real solution thanks to Zilliqa, the world’s first blockchain with a sharding implementation.
Zilliqa solves the scalability problem through a version of sharding called transaction sharding. It’s a more limited sharding solution compared to state sharding (which has technical challenges that still have not been solved and may never be solved), but it’s a form of sharding that works.
And frankly, we need that solution sooner than later.
But before we delve into just HOW Zilliqa has implemented sharding, let’s look at the general problem of scalability and why it’s so critical to achieve if blockchain is to move beyond the interesting science experiment it is and leap into the real world as a disruptive force.
What Is Scalability
In layman’s terms, scalability is simply increasing the throughput of blockchain technology.
Or in even simpler terms, improving the transactions per second the blockchain can handle.
What is a transaction? Simply any operation issued by a user that changes the state of a system — basically, any data sent over the blockchain network is a transaction.
So scalability is increasing the speed at which a transaction moves through a blockchain network.
The problem here is that scalability is a really, really, really hard thing to achieve in a blockchain without sacrificing security and decentralization.
The Problem with Blockchain & Scalability
Decentralized technology is the new ‘thing’ in the tech space with blockchain at the very forefront of a grand vision to decentralize the internet.
Blockchain, with all its intoxicating promise, is poised to disrupt industries, improve security, and if the crypto evangelists are to believed, reshape the fundamental structure of the very internet itself.
But first, it needs to be faster.
Much, much faster.
The problem with decentralized solutions is that it’s often significantly slower than centralized solutions.
And in the case of a blockchain’s transactions per seconds, several orders of magnitude slower than what’s offered by even the slowest of centralized servers.
And in the most recent hiccup, Ethereum was brought to its knees and was pretty much unusable for a straight week when only few thousand people were playing CryptoKitties — the first example of Ethereum being used for anything but ICOs.
Which is to say, not ready at all.
Ethereum currently supports transaction speeds of about 15 TPS.
Which is clearly not enough to handle any real application.
So how fast does Ethereum have to be to handle ‘real word’ use?
Let’s compare this to a global application that requires sustained throughput speeds for important financial transactions: The VISA network.
VISA’s servers offer average daily transaction speeds of about 2500 TPS to 5000 TPS.
Ethereum does 15 TPS right now.
So Ethereum is a few orders of magnitude TOO slow to handle the number of transactions per second that even a single small real-world app would require.
But it gets worse.
With hundreds — even thousands — of Ethereym dApps all promising to use the single shared Ethereum world computer to decentralize everything from Artificial Intelligence to your smart toaster, it’s pretty obvious there is a big problem that must be solved before Ethereum is usable…and useful.
To bring in an analogy: Blockchain speeds are the equivalent of using one of those dial-up modems in early 2000’s to connect the internet while trying to run modern web applications like Netflix over that 56 bmd connection.
So Blockchain, in its current state, is way too slow to handle any real-world usage.
Even a single small android app with a few thousand users will likely crash the entire Ethereum network and render it unusable for everyone. Trying to imagine dozens, hundreds, or thousands of such applications running on Ethereum is downright depressing.
Hint: think about this next time you start investing in dApps built on Ethereum that are promising to change the world.
However, there may be solutions. Instead of trying to upgrade an old car, why not build a brand new one from scratch.
Enter a new generation of blockchains that are built ground up with scalability in mind.
It is to these new generations of scalable-first blockchains, if at least one of them succeeds, that could become the foundation layer of the new web 3.0.
This is where Zilliqa enters the picture, the first scalable blockchain that has already solved the scalability problem through the implementation of sharding, several years ahead of everyone else.
To gain real-world adoption and disrupt all those industries, a blockchain has to process enough transactions per second where there are no waits.
There have been some proposals to solve scalability — all of them theoretical with no working examples yet implemented.
Right now Ethereum has centralized a large chunk of the developing talent, all working on adding to the infrastructure. So Ethereum, at least until something better comes along, is our best yardstick to measure the length of the scalability problem — and how close we are to solving it.
The end goal, of course, is to narrow the distance in transaction speed throughput between Blockchain TPS and non-centralized (servers) TPS.
General Scaling Approaches
There are two approaches to solve the scalability problem:
- Offchain scaling: using outside services to handle the bulk of the transactions (sidechains, parachains, centralized servers) while settling the final transactions/ledger on the blockchain
- Onchain scaling: increasing the throughput of the blockchain itself
Here’s a list of the specific scaling solutions that have been proposed to fix Ethereum speed bottleneck:
- Gas Limit Increase
- Parallel Process Transactions
- Proof of Stake
- Payment Channel
By far, most of the Ethereum maximalists who feel Ethereum will become THE blockchain of the future which powers a decentralized ecosystem of dApps, are hyping up Proof of Stake and Plasma as THE definitive solution to the scalability problem.
And, if the ethereum roadmap accomplishes what it promises, this may even be true.
But the truth is, we are years away from a workable solution at best…at least if we are looking to Ethereum to solve the problem for us.
A Look at the Current State of Scalability
Here’s an overview of the state of scalability by Fred Ehrsam (co-founder of coinbase) taken from his absolutely enlightening medium post about the state of Scalability:
It’s likely a combination of many of these solutions together which will answer the scalability problem.
But if you look at the actual progress, we are at least 2-3 years away from getting there.
How Fast Do We Need to Run Real World Applications on the Blockchain
To estimate how many Transactions Per Second (TPS) you’ll need, you need a good yardstick to measure against. A good yardstick to aim for, at least for an enterprise application, would be reaching TPS of the VISA network, which is a global network.
VISA’s network handles between 2500 TPS to 5000 TPS, However, they do scale up to 60,000 TPS if needed (Christmas).
Let’s imagine we want to bring something similar to VISA using the Ethereum blockchain. This is a reasonable comparison since one of the disruptive use cases for blockchain technology will be in the Payments and Money Remittance areas.
If Ethereum handles about 15 TPS right now and we assume about 2000 TPS is about the speed needed to run a medium sized web application (anywhere from 1 to 10 million users or something approaching VISA at its the lowest requirement for daily TPS), then Ethereum needs to scale at least 150x to handle this.
If you look at the chart above of some of the easier-to-achieve proposed scalability solutions which don’t require off-chain/sidechain solutions or sharding and assuming the conservative lower-bound increase from each improvement to Ethereum which is currently at about 15 TPS:
- Gas Limit Increases (2x)
- Parallel Process Transactions (2x)
- Swap Virtual Machines (3x)
- Proof of Stake (2x)
Implementing these improvements to Ethereum (sans the Proof of Stake upgrade to the Ethereum network, these changes are the relatively low hanging fruit on the difficulty scale and don’t require a radical reworking of the entire code base) will boost Ethereum to about 360 TPS, assuming a conservative estimation of TPS improvement.
By far the biggest upcoming change is the move from Proof of Work (POW) to Proof of Stake (Casper upgrade).
Casper will at most improve Ethereum transaction speeds from about 15 TPS to 75 TPS or at best 2-5x faster.
This is far below what’s need to even run a small web application with a few hundred thousand users. And Casper is about a year away.
Even more concerning is that we are still an order of magnitude slower than needed to run any application with millions of users.
Now we could assume that on some of these fixes Ethereum could reach say just about 1000 TPS, but this still won’t handle any serious real-world application.
It might be fine for 100,000 users but not 2 million users.
If we look at scaling Ethereum throughput to handle Facebook-like levels of transactions (the ability to handle hundreds of millions of users), the goalpost is moved even further.
The only solutions that can bring the transaction speeds to scale to the millions…and hundreds of millions are dramatic improvements.
We need to see 100x or more improvements. And only implementing the ‘hard’ scaling solutions can bring that level of improvement:
- off chain/ side chains (Raiden, Lightning Network, etc)
In truth, it’s likely to be a combination of some or all of these proposed improvements that inch blockchain towards the scalability needed to decentralize the web and handle hundreds of thousands of transactions per second.
Here’s what one of the main Ethereum developers Vlad Zamfir has publically tweeted about the state of Ethereum:
Blockchains Trying to Solve Scalability
There are a number of upcoming blockchain projects that are looking to solve the scalability by building in scalability from the ground up.
Some of these new projects are:
- Aelf: A multi-chain solution where transactions are parallelized through side chains
- DFINITY: a completely new framework for a new blockchain with aims at dethroning Ethereum while providing high throughput
- Rchain: a whitepaper project that’s been in the works for several years.
- Zilliqa: world’s first scalable blockchain through onchain sharding
- Kadena: an interesting approach that puts a twist on current POW implementation to squeeze out scalability without the use of on-chain sharding
Let’s talk about Zilliqa which as of 2018 is the only blockchain with an actually implemented scalability solution as of yet.
Enter Zilliqa: Scalability Solved Now, Not in Years
There are some tangible solutions that can solve the scalability problem and bring Blockchain technology into the mainstream.
Two of the most promising solutions to fix scalability are Plasma and Sharding, one being an off chain solution while the other an on-chain solution.
If you look at the chart in the previous section, you’ll see these can bring an order of magnitude faster transaction speeds (100x).
There’s a lot of talk about Ethereum implementing some form of sharding.
But even at the highest levels of development, it’s pretty clear Ethereum has a few years to go before Plasma / Sharding is taken from theory to reality then tested.
Full state sharding is NOT simply a matter of moving from their testnet to mainnet, but still unimplemented at the code level (and the actual paper on how to achieve it is plenty of hard-to-solve gaps that need to be filled before it could ever be coded into reality).
So blockchain tech is a few years away from achieving the promised land of real scalability.
Or are we?
Yes, that’s right. Blockchain now has a working implementation of Sharding technology.
If you’ve been following along up to now, this is absolutely mind-bogglingly huge for blockchain as a whole. Rather than wait around for years while the smartest minds work on sharding solutions, we can take a working sharding implementation and USE it for real-world applications.
Why is this a big deal for blockchain tech? Blockchain has, as of yet, been a promising technology but still too slow to be used for real-world applications. What real dApp with more than a few thousand users can run on only 15 TPS?
The answer is pretty much 0.
Trying to build a real-world business on the backbone of blockchains that can’t handle more than a few thousand users is a guaranteed recipe for failure.
But if a blockchain can, in fact, handle 2500 TPS to 10,000 TPS, we can see actual real-world use cases tested on blockchains. If Zilliqa can prove it’s technology with some real word enterprise applications, Zilliqa could become the de facto backbone for enterprise blockchain use.
Zilliqa comes out of an R&D project by the University of Singapore based on the technical whitepaper.
That research into the implementation of the whitepaper evolved into the Zilliqa blockchain.
Zilliqa features near linear scaling where each new node that joins the network increases the blockchain’s TPS.
In layman’s terms, the more nodes that join the network, the faster the network runs. This is a unique approach in that most blockchains decrease in speed as the number of nodes increase. Zilliqa gets faster.
Unlike many blockchain projects that are only a promise, Zilliqa has already implemented sharding and has a working testnet.
In their most recent experiment on the testnet, Zilliqa achieved 2500 TPS with 3600 nodes on the network.
The Team Behind Zilliqa
The team behind Zilliqa are some of the brightest minds in blockchain space, pushing the envelope of technology further and faster a few years ahead of other teams attempting the same thing (scalability).
Zilliqa comes out of a well-funded University of Singapore project. Prior to the Zilliqa ICO, there was, in fact, a fully working blockchain platform (the product of two years of work by the Zilliqa team under the auspices of the University of Singapore).
Zilliqa is led by CEO Xinshu Dong. Xinshu Dong has extensive experience working on blockchain scalability and security as Lead Engineer with Anquan, a private scalable blockchain that specializes in financial and e-commerce applications.
Other notables include the highly influential Loi Luu, founder of Kyber an official Advisor to Zilliqa.
Prateek Saxena, the Chief Scientific Advisor, is Loi Luu’s (the CEO & Co-founder of kyber.network) professor. Saxena specializes in the fields of blockchain and computer security.
How Does Zilliqa Work
The groundbreaking feature that Zilliqa brings to the table — something no other blockchain has yet achieved — is sharding.
Other blockchains promise sharding within a few years.
Zilliqa has already done it.
So What is Sharding?
Sharding as a concept comes directly from distributed databases but has never yet (before Zilliqa) been implemented into a permissionless public blockchain before.
The idea behind sharding, as it applies to Blockchain, is to algorithmically split up all the nodes in a network into a smaller collection or subcommittee (called a shard) that process transactions in parallel. Each shard has it’s own microblock and processes in parallel with all the other shards with the final result merged.
But Don’t’ We Already Have ‘Fast’ Blockchain / Ledger Projects Already?
Yes, there are a few blockchain projects that claim high transactions speeds.
- NEO, for example, claims 1000 TPS.
- EOS claims 1000 TPS
- IOTA claims thousands of TPS
The devil is in the details, however. While these projects claim fast transaction speeds, when you look at how their networks operate, you’ll see some serious compromises have been made to achieve these speeds.
Zilliqa vs ‘Fast Non-Sharding Blockchains’
Let’s briefly compare how Zilliqa’s sharding compares to other blockchains that claim very fast speeds without utilizing sharding.
Zilliqa Vs NEO
NEO claims fast transaction speeds (1000 TPS+) but this is only because there are a FEW nodes running the entire NEO network.
With public ledgers, fewer nodes always result in faster speeds as less data about each transaction needs to be perpetuated across the network (less nodes = less data to send = faster speeds).
Even more so when those nodes are permissioned (who gets to be a node is regulated).
Permissioned ledgers trade security for speed.
NEO is completely centralized with the control of the nodes completely managed by the NEO team (which by the way are based in China, a country infamous for the lack of social freedom).
There are only a handful of NEO nodes (7 at time of writing) and those nodes are controlled completely by the NEO development team.
NEO is NOT a decentralized network, but rather completely centralized. Geographically, NEO is decentralized (their nodes are scattered around the world). As StoreofValue put it, NEO has “decentralization of location but still a centralization of control”
Zilliqa Vs EOS
EOS goes the same way as NEO: the nodes are federated with the development team only allowing trusted parties to act as nodes.
It’s easy to offer a fast blockchain when you can select the handful of node operators and make the assumption that those nodes are friendly and won’t be acting against the network. You can’t do this in a permissionless network where you have to assume your fellow nodes may in fact be hostile.
So EOS offers (or claims to, we still don’t have an actual mainnet or testnet to verify) faster transaction speeds than Ethereum by an order of magnitude, but at cost of decentralization. A well-planned attack could bring the entire network down with just a few nodes controlled by the team.
IOTA through the DAG consensus (an alternative consensus algorithm to blockchain) does allow high-speed transactions. The algorithm is not bottlenecked to single blocks.
This allows rapid transaction speeds (with no transaction fees). However, there are serious security concerns with the DAG as of yet.
It’s a promising tech, but still in the very early stages. Blockchain is by far a more secure and well-known technology.
Why Zilliqa Stands Out in a Crowded Space
There are dozens and dozens of blockchain platforms right now, each promising to be the final answer.
Platforms like EOS, NEO, and Cardano all promise grand improvements over Ethereum through scalable transactions speeds.
However, Zilliqa stands out as the most technically superior in terms of pure blockchain infrastructure with the ability to support blazing fast transactions on an open permissionless ledger, years ahead of the competition.
This gives applications a chance to utilize blockchain in the real world.
Now – Not in the distant future.
Here’s why Zilliqa may just be the one blockchain that rules them all over 2018.
1. Sharding. Now. Not In 3 Years
Zilliqa’s sharding technology works now. So far, the Zilliqa has launched a working testnet with a number of tests. Their live mainnet is due out Q3 (six months). Once the mainnet is live, the Zilliqa blockchain will be open for public use and real application can be developed, utilizing the smart contract layer.
2. Network Gets Faster with More Nodes (Linear Scaling)
Contrary to most blockchain networks that get slower as the network size increases, Zilliqa utilizes a linear scaling approach where the network’s throughput capacity increases with each new node that joins the network.
This means the more miners who join the network, the faster Zilliqa will be.
Why does this happen?
The larger a network (more nodes in network), the more data about a block must travel (to each node) before that block can be confirmed as part of the blockchain. This results in slower transactions speed as the network grows in size because data about new blocks must be broadcast to more and more nodes and the process is sequential in nature.
Zilliqa through its advanced sharding implementation (transaction sharding) avoids this through parallelization of the data flow across the network (data can travel in parallel across the shards).
Here’s a look at the Transactions Per Second (TPS) speeds Zilliqa recently tested on their testnet by adding new nodes to the network:
3. Highly Secure Network
Zilliqa has a unique consensus algorithm Practical Byzantine Fault Tolerance (PBFT).
PBFT is a very secure consensus scheme with the assumption that a portion the nodes in the network is hostile (working against the network).
As such, each node must independently verify all transactions and the results are shared between all nodes with a consensus reached by the majority.
Thus the network is protected against hostile nodes or clusters of hostile nodes.
Read about the advantages of the PBFT consensus here.
4. Unique Proof of Work Scheme (and Environmentally Friendly)
Zilliqa uses a Proof of Work (POW) scheme to secure the network. However, it’s a drastically modified version of the POW you find in Bitcoin or Ethereum in that miners use POW to establish their identities and the PBFT to establish consensus.
Normally, POW (such as with Bitcoin and Ethereum) is very energy inefficient because the miners all compete by solving a complex mathematical problem and the first to complete this problem gains the rewards (and the verified transactions completed by that miner become the new block on the chain). This helps secure the network but it’s also wasteful in that all the computing power solving each block is wasted as only one mining winner emerges.
With Zilliqa, POW is only used to establish identity and one POW writes to multiple blocks at a time (rather than 1 single one) resulting in less energy used (vs Bitcoin or Ethereum) and higher rewards for the miners.
Zilliqa states this:
In Zilliqa, roughly 12 hours of PoW needs to be performed each month (at the beginning of each epoch) — this is where the graphics card is at full load. During the rest of the time, the graphics card will be running in idle mode where minimal electricity is consumed. The estimated electricity cost of mining on Zilliqa is about USD 2.8/month in Singapore. In contrast, the cost of mining Ethereum is estimated to be about 9 times more at USD 26.25/month as the graphics card needs to be mining consistently for every new block.
5. Lower Transaction Fees
Ziliqa’s unique POW + PBFT algorithm allow for much lower transaction fees than competing blockchains like Ethereum and NEO.
6. More Profit for Miners
Along with lower transaction fees than Ethereum, Zilliqa’s PBFT and POS hybrid scheme result in more profitability for miners and incentivizes more new nodes (miners) to join.
More profitability means there will be more nodes joining the network which adds more TPS throughput to the network and of course, more security.
Zilliqa comes with two other benefits for its miners and users. First, the total energy cost per transaction will be constant as the network expands. Compare this with blockchains such as Ethereum or Bitcoin where the total energy cost per transaction increases with the network size. Second, we expect the transaction fees in Zilliqa to be much lower than those in Bitcoin or Ethereum.
7. Smart Contract Layer
The Zilliqa team claims that Scilla makes it easy for developers to port over dApps from Ethereum to Zilliqa.
The smart contracts will be non-Turing complete which has both advantages (over Turing complete) and disadvantages.
The advantage is that smart contracts written in a non-Turing complete language are more secure and stable than in a Turing-complete language.
This means you can avoid some of those glaring security holes that plague Turing-complete languages like Ethereum’s Solidity, such as the recent Parity bug that lost over 200 million USD of Ethereum last year.
Non-Turing complete languages are far more efficient for certain types of applications.
The disadvantage is that Turing-incomplete languages are less flexible and more limited in nature than Turing complete languages.
However, it is possible to still write and execute Turing-complete languages ON the Zilliqa blockchain. The limitation only applies to the default smart contract language itself.
8. Transaction Finality
Unlike Ethereum, Zilliqa has proven transaction finality due to the PBFT consensus algorithm.
There are pros and cons to this choice, but one big advantage with transaction finality is that there is no need to wait for confirmations (such as when sending out a transaction over Ethereum). This eliminates the double spend risk and provides significant speed advantages — both which are utilized to the maximum with sharding. You can read more about Transaction Finality in Zilliqa’s overview.
9. Transaction Privacy
Zilliqa will be adding a privacy feature to transactions in the future, giving Monero-like privacy features directly to the Zilliqa chain. With growing concerns about governments cracking down on decentralization efforts, privacy is a big investment theme over 2018.
We are seeing privacy-focused cryptocurrencies such as the Orchid Protocol (TOR on the blockchain), Nucypher (a privacy protocol), TheKey (storing digital identities safely on the blockchain), and Keep (using trustless smart contracts to secure private data), and Monero (anonymous payment currency).
Adding strong privacy features to Zilliqa will go a long way to increasing mainstream adoption and likely capture even more investment interest in Zilliqa over 2018.
10. Blockchain Interoperability
Zilliqa promises to seek out an interoperability layer (alternatively “layers”) in the near future, allowing Zilliqa cross chain communication (talking to other blockchains through some API).
If done, this adds extended functionality that will allow Zilliqa’s high-speed chain to be integrated into the greater blockchain ecosystem through cross-chain transfers.
Zilliqa would be joining the efforts of Polkadot, AION, ICON, WANCHAIN, and AELF in seeking to bridge the gap between blockchains through inter-chain communication.
It could very well be that Zilliqa’s role in the new internet of blockchains could be as the engine that powers the applications that require fast transaction speeds; through an interoperability layer, Zilliqa’s powerful abilities could be harnessed by other chains and thus the dApps running on those chains.
Future Additions to Zilliqa
Zilliqa is investigating future additions to their core blockchain infrastructure as well.
1. State Sharding
Full-fledged general use sharding includes state sharding, something which Zilliqa has not yet implemented. However, Zilliqa will be researching state sharding in the future with the intention of implementing it in a secure manner.
2. Sidechain Support
Zilliqa team has stated that the Zilliqa platform can support sidechains like Plasma. This would allow even more throughput for even more demanding applications. The exact details of how those sidechains will be hooked up will need to be figured out (see #33 on Mega F&Q), but it appears this is part of the Zilliqa future roadmap.
The Zilliqa Cons: Challenges That Zilliqa Must Conquer
I strongly feel Zilliqa is right up there with the other blockchains that have a chance to be the new ethereum/ADA/EOS of the world. But let’s look at some of the potential cons.
Because there are some and it’s good to be realistic in your assessment.
1. Non-Turing Complete Language
Turing complete languages allow you to do slightly more than non-Turing complete. Specifically, Turing-complete allows the use of infinite loops while non-Turing complete do not.
So the limitation here will be in the type of applications that can be developed as a dApp on the Zilliqa blockchain.
For most applications, this won’t be a problem — only a subset of them need a Turing-Complete language.
2. Non-State Sharding
This is the biggest con. Zilliqa implements sharding, but the sharding is transaction sharding, not state sharding. State sharding is more complex and, as the Zilliqa team has stated, still being researched. There are a lot of problems that need to be worked out and no one has yet implemented a working state sharding for blockchain yet.
I do note that Zilliqa intends to research this and potentially add a version of state sharding to the Zilliqa network, but this is in the future.
3. Memory Storage Problems
Currently, Zilliqa does not store state information on their blockchain itself.
The storage of state information is needed for the implementation of smart contracts on a platform.
Zilliqa states they will look at partnering with decentralized database systems as one possible solution to this (storing state information on another blockchain). However, I will note that if this is the case, the Zilliqa guys are relying upon another nascent blockchain field of study — one that may require years of proper development to function properly as your solution.
Zilliqa has listed adding smart contract functionality to their system, so I expect this issue will be resolved by some means before the Mainnet launch. The question is how Zilliqa manages to do it and if they can do it in such a way that does not negatively impact the high throughput ability of their blockchain.
Recently, Zilliqa has partnered with Bluzelle, the crypto that promises a decentralized database solution. The idea is that the smart contract history could be stored on a decentralized database, solving the memory problem that Zilliqa must overcome when implementing smart contracts with sharding.
4. Lack of Marketing
Looking beyond the potential tech limitations of Zilliqa, the team is very much cultivated from the hardcore programming/math/computer science crowd.
While they are some of the brightest minds in blockchain space, they are not marketing heavy. This means you won’t likely see hype or pump news being perpetuated by the team. They are focused on letting the technology itself deliver.
This is very much in line with how the Singaporean technology sector works. The focus is on hard work, getting the technology working, and delivering a real product — not on hyping up products.
Unfortunately, a lot of cryptos (and investor sentiment) are driven by hype.
So one area that Zilliqa may require some help is in their marketing approach — if only to spread awareness of how strong Zilliqa is.
I strongly feel Zilliqa has the means to become a Top 10 coin and even a Top 5 coin based on its strong fundamentals, working platform, and obvious use cases, but the team needs to up their marketing so the average crypto investor realizes how good Zilliqa really is.
Zilliqa As a Cryptocurrency Investment
We’ve talked a good deal about the technical innovations offered by Zilliqa. But how does Zilliqa stack up as a speculative investment?
That is, can you make a lot of money by buying into Zilliqa early?
The answer is, yes I feel Zilliqa is a very good bet for some huge ROI’s over 2018, as it releases the public testnet and then mainnet.
Currently, Zilliqa is trading between .05c to .06c.
The market cap of Zilliqa is about $300 million. Initially, Zilliqa was about 1 billion shortly after hitting exchanges.
- ATH: 15c / 1300 Sats
- Current: .05c / 700 sats
- ICO: .0038c
In BTC value, we are slightly less than half of the all-time high. Now, the crypto has held a remarkable amount of value. At its peak (24 hours after hitting exchanges), Zilliqa reached nearly 18x ETH and over 50x USD value from ICO, making it one of the top performing ICO’s ever.
The current value has fallen in the two weeks post-ICO to roughly 1/3. However, this makes Zilliqa a very good value indeed. The Crypto markets had one of the worst crashes in recent history on Feb 5th with Bitcoin dropping to 6,000 USD, ETH to about $550, and every other crypto with 50-60% drops.
This drop was not only limited to crypto. The DOW had the largest single drop in history.
Despite this bear market, Zilliqa maintained value. Remember that even at the peak crypto crash during this period (Zilliqa dropped to about .04c), Zilliqa was still up about 12x from ICO! And the value of Zilliqa vs BTC and ETH remained very strong indeed (the USD value dropped mostly due to BTC and ETH falling 40%).
What does this say about Zilliqa? It’s a very strong cryptocurrency. If it can maintain significant value even through the worst crash, it shows there are quite a few strong investor hands who believe in the project.
Solving scalability is THE biggest problem that must be solved before blockchain can realize it’s potential. Zilliqa is the vanguard of this movement with the only working solution. I believe over 2018 as Zilliqa’s milestones are reached, the value will explode upward.
My personal predictions is that Zilliqa can reach between 3 to 5 billion by the end of 2018. Zilliqa at only 300 million is a bargain price for what the project is offering.
This is one of the strongest projects with the potential to be disruptive in the blockchain space.
Jumping from 300 million to 1 billion will be easy.
Reaching 1-3 billion should be possible within 6 months if the market is good. 4 to 10 billion is achievable if Zilliqa delivers on all promises and starts getting some serious partnerships building apps on their mainnet this year.
Here are some of the main milestones that should see some significant value spikes to the price:
- Release of Public Testnet (March)
- Release of Scilla (high-level programming language)
- Release of Smart Contracts
- Release of Mainnet (Q3)
Zilliqa Compared to Other Blockchain Investments
Now to provide some idea what Zilliqa could be worth (and should be worth), let’s look at some other platform projects in the space as of the end of February 2018.
Not that these values will likely be different based on the date you read this article.
- ADA (8.3 billion)
- NEO (7.5 billion)
- EOS (5.3 billion)
- LISK (2 billion)
- QTUM (1.8 billion)
- ICON (1.4 billion)
- Rchain (620 million)
- Stratis (600 million)
- Waves (500 million)
- Dragonchain (380 million)
- Zilliqa (320 million)
Now it’s hard to say what cryptos should be valued at what. The truth is that all these values are wildly speculative and mostly hot air. But it does give us a target to aim for in how to value Zilliqa.
In my opinion here, the value of Zilliqa to other projects who arguably offer absolutely nothing significant to blockchain space as a whole is superior.
Most of these other blockchains fall into two camps:
- A clone of Ethereum with nothing extra added
- A whitepaper project, heavy of promises but years away from implementation
Zilliqa vs Cardano (ADA)
For example, ADA with absolutely no working product and on pure hype alone achieved a market cap of 30 billion at the peak. Even after the crypto market has fallen by at least 50% over the past month, ADA is still valued at 9 billion. ADA is a promising rival to Ethereum, but realistically, it’s at least 2 years away from showing anything tangible. As such the 8 billion in market cap, based on what it can do now, is ludicrous.
Zilliqa vs EOS
EOS, without a working anything, achieved about 4 billion in market cap. EOS is also highly federated and arguably one of the least decentralized projects out there. Currently, there is no live mainnet.
Zilliqa vs Rchain
Rchain is another scalability project that’s big on the hype but so far has actually delivered nothing tangible. That’s not saying there won’t be a working mainnet in time, but right now we just have price without product.
Zilliqa vs Other Blockchains
There are plenty of other platforms that don’t offer any real solutions or anything new to space. I’m not saying these chains are worthless, but many of them don’t break any new ground or offer anything compelling over the established chains.
Stratis, at 600 million, is pretty much just another ethereum clone but which promises developers the ability to use a more friendly programming language to write contracts.
Dragonchain is simply YOBC (Yet-Another-Blockchain Clone).
I don’t want to unfairly attack other projects here. But the point remains that when trying to value where Zilliqa’s future marketcap should fit it, there is a good case here to say that Zilliqa based on its ground breaking sharding could (and should) be valued somewhere between 2 billion to 10 billion.
Is Zilliqa a Good Investment?
I believe given Zilliqa’s strong team and a working sharding solution (in test phase with a public testnet being released within a month) makes Zilliqa a compelling investment for those looking for a mid-term to long-term investment.
The crypto market has been bearish for about three months (Jan to March) which given how much the market has risen in just 6 months is hardly surprising.
I have personally invested in Zilliqa and it’s one of my biggest investments to date, percentage-wise of my portfolio. This is a coin I do personally believe in and I’m going long on this. I believe the value could be anywhere from .40c to 1 dollar by the end of 2018.
Scalability is the greatest problem that must be overcome for crypto to become more than a tech experiment. I believe that cryptos that focus on solving scalability will attract significant investment over 2018 and 2019, and the blockchains that deliver on their promise and show proof of scalability will accrue significant market cap (dozens of billions).
Zilliqa is the first blockchain that has implemented a working shard solution. While the sharding is not a full state sharding solution, it’s still a version of sharding that works here and now.
True state sharding has never been implemented in blockchain and there is significant possibility that state sharding may well never be achieved in the real world (there are hard technical and theoretical hurdles that have not yet been solved).
Zilliqa’s transaction sharding is a true form of sharding, though with some limitations. The good news is that for a subset of applications, transaction sharding is the perfect use case. I am betting that Zilliqa can distinguish itself in the blockchain space and carve a niche out for itself, especially with business and enterprise applications that need high throughput.
So yes, Zilliqa looks like a very good investment, especially for those who can hold till the end of 2018. I feel it’s a multi-billion dollar market cap crypto.
Update: Zilliqa just won the Binance Community Coin Vote and was listed on Binance March 5th (2018). This is fantastic news as it gives Zilliqa the liquidity launchpad to explode in value during the next big bull run (it would be hard to do WITHOUT having the access to the liquidity volume that Binance has at this time).
— binance (@binance_2017) March 5, 2018
The Final Word
Zilliqa is one of the most promising blockchain projects of 2018.
It’s taken on and solved the biggest problem facing blockchain today: scalability and it’s done so a good 1-3 years ahead of the competition.
Currently, no other blockchain has implemented any form of sharding on any public blockchain. Right now, Sharding (or some variation of it like Plasma) is still a theory (and trapped as whitepaper ideas). Zilliqa has already deployed their testnet with a number of successful tests already.
There are other ‘fast’ blockchain projects like EOS and NEO, but these offer faster speeds by compromising blockchain security, by centralizing the decentralization (trading security for speed). They have not achieved fast transaction speeds through next-generation technology like Sharding, which up until this point has been the Holy Grail.
The fully-fledged live Zilliqa mainnet is due out only within a few months; the Ziliqa team already have partnered with big companies who need lighting fast transaction speeds building out and deploying real application tests on the Zilliqa blockchain.
On technical merit alone, Zilliqa is an outstanding achievement. Combine this with their intention to add a fully functional high-level language for smart contracts within a few months, integrate privacy into the transactions, and pursue interoperability with other chains makes Zilliqa one of the most interesting new blockchain projects right now.
Keep a close eye on Zilliqa over this year.
Zilliqa may well, by the end of 2018, be one of the top 10 cryptocurrencies if the team delivers on their promises.
Disclaimer: This is not investment advice! This article represents my own opinion. Please do your own Due Diligence before investing in any cryptocurrency. Crypto is volatile and there are no guarantees and you can certainly lose money if your investment goes bad. Also note that I have personally invested in Zilliqa.