Building Protocols for Scalable Decentralized Applications

Abstract

Blockchain protocols are a promising technology in the abstract, but, in reality, fall short of the promise of supporting arbitrary decentralized applications. For example, Bitcoin supports <10 transactions per second and Ethereum’s gas limit prevents computationally expensive applications to execute on its chain. This chapter provides an overview of mechanisms that have been proposed to overcome these limitations. In particular, we describe novel consensus protocols, sharding mechanisms, state and payment channels, subchains, and federated protocols. Additionally, we give insight into the tradeoffs and benefits of the different approaches.