Scalability And Latency of Blockchains: Important Topic To Be Discussed By Regulators and Experts
- Regulators met to discuss financial technology, digital currencies and blockchain technology
- Some topics such as scalability were missed from the discussion
A few days ago, the U.S. Securities and Exchange Commission’s (SEC) Strategic Hub for Innovation and Financial Technology, that is also known as FinHub, hosted a forum related to financial technology. The goal was o talk about blockchain technology and virtual currencies. At the forum, there were different panel discussions that included several important individuals such as the Director of FinHub, Valerie Sczepanik or the SEC Chairman Jay Clayton, among others.
It’s Important To Remember About Scalability
In a recent article written by Andrew Tinianow in Forbes, she explained that the blockchain universe is very large and there are many topics that must be discussed. Although she knows that it would be impossible to explore every fact, there are some important things that must be addressed as well.
One of the unexplored topics was related to scalability and latency of public blockchains. As she explained, there was almost no mention of the challenges that are currently affecting real-life adoption of distributed ledger technology (DLT).
She has also mentioned that energy consumption and transitioning to proof-of-stake (PoS) is also an important topic that must be discussed. Indeed, she explained that Proof-of-Work (PoW) networks, such as Bitcoin (BTC) or Litecoin (LTC), require large amounts of energy. Nonetheless, this topic was not discussed at the forum.
Bitcoin miners use ASIC hardware that allows them to process transactions in a much more efficient way and earn rewards. However, these miners use large amounts of energy to operate. At the moment, there are several consensus mechanisms but none of them has proved to be a viable solution to PoW networks. It will be important to see whether there are other networks that can implement alternative systems such as PoS.
Another topic that the author of the article mentions is related to the recent work that was conducted at Wyoming. The state has passed legislation that is very positive for digital currencies and blockchain technology. The lead architect of these regulations is Caitlin Long that has been working with companies and regulators in the state to have this law approved.
Other topics that were not discussed are related to Decentralized Finance, using crypto loans, blockchain technology in machine-to-machine transactions, stablecoins and how average people are not engaging with digital currencies.
For example, stablecoins have been expanding in the market, Tether (USDT) became the largest stablecoin even when it has been involved in different controversies. There are other digital assets such as USD Coin (USDC) that are currently trying to take a larger portion of the stablecoin market.
About these issues, Tinianow commented:
“What does all of this mean? There is a swell of excitement for digital assets which continues to grow. And yet, much of the discussion at the event was aspirational. This tells me we are still very early in the space.”
The SEC is trying to impose the correct regulations to space and is considering how to be able to deal with new securities and virtual currencies as well.