Ethereum & Bitcoin Killer? Can BaseChain overthrow the Lightning Network: Loom Network

Ethereum, the 2nd largest cryptocurrency after Bitcoin, is a decentralized platform for currency and new species of applications. The Ethereum network, unlike the Bitcoin network, comprises not only a cryptocurrency, but also has Gas and Gas Limit. It enables users not only to return for transactions but also begin smart contracts and dapps. Ethereum became quite popular among developers across the World because one could compose code that builds applications called dapps using Ethereum, which eventually translated into several use-cases across the World.

However, Scalability has become one of the most hotly-debated topics in the cryptocurrency space as cryptocurrencies like Bitcoin and Ethereum struggle from issues like serious network congestion as they scale. Bitcoin’s scalability problem, for instance, is based on current limitations on the number of transactions the bitcoin network can process. Cryptoticker has previously reported on different Bitcoin Scaling solutions including Layer 1 and Layer 2 solutions.

Layer 1 Solutions

For layer 1 approaches, it is strived to improve the throughput speed on the blockchain itself. Bitcoin Cash, for instance, attempts this approach. Bitcoin Cash raised the block size of the blocks, which are issued every 10 minutes, thus giving higher throughput per 10 minutes. An average transfer still takes on average about 5 minutes. However, a blockchain that includes larger blocks becomes frequently difficult to completely download and sync. People with a limited internet connection could not engage in the network in the future. Litecoin however, scales over the block time. Instead of getting 10 minutes of transactions for a block, Litecoin takes just 2.5 minutes before the block is written to the blockchain.

Ethereum relies on a technique called sharding. It produces sub-blockchains to the main blockchain, which can communicate freely with each other.

Layer 2 Solutions

Many scaling approaches often spin around so-called second-layer scaling approaches. This is because scaling over the blockchain itself will always be challenging and is usually discarded as unworkable.

The most well-known example here is the Bitcoin Lightning Network. This is to ensure fast and cheap transactions with potentially unlimited transaction throughput. However, the ease of use of the Lightning Network is currently very limited.

Another less known is Loom Network’s Basechain (previously called PlasmaChain). Using a delegated Proof of Stake chain secured by more than 21 delegators, Loom Network is able to overcome the mentioned scalability issues on a base layer by offloading operations to their own connected chain.

Loom Network: A case in solving the scalability problem

Loom Network is a fast-growing multichain ecosystem that ultimately promises users the ease of using centralized services with all the advantages of a highly decentralized infrastructure. Initially developed with the goal of solving only Ethereum’s scalability issues, they now have plans to support Ethereum, TRON, Binance Chain & Bitcoin in the coming days, with EOS & Cosmos on the roadmap too, thus becoming truly ‘multi-chain’ in their functionality.

Data courtesy of DappRadar Loom Report 

Data courtesy of DappRadar Loom Report 

Loom has expanded its offerings in 2019 to include several new dapps on their Basechain along with a similar increase in DAUs too as portrayed in the figures. Most of their dapps are games but this is slowly changing, given the early stage that the dapp market is still currently in. Interesting games such as the cyberpunk role-playing game Neon District and Blocklords have been recent additions to Loom’s Basechain. Game developers and the overall developer community have especially heaped praise on Loom for their developer-friendly approach towards solving the mentioned scalability problem.

In terms of Loom’s Token, LOOM is the ERC20 cryptocurrency that is used for various purposes including to reward contributors, secure the network, and to serve as a payment method. Loom has clear plans to expand beyond gaming into Decentralized Finance (DeFi) in 2020, and announced a planned 10x improvement in speed and reliability. Furthermore, Loom Network also recently crossed over 50,000 wallets in its Basechain, thus showing signs of growing and scaling rapidly.

“When it comes to Loom Network’s approach, it’s not just about solving problems for developers. It makes the entire experience for users considerably more fluid too,”

The Verdict.

It is important to realize that the scalability issue and the blockchain space is still at its nascent stages of evolving into a fully scalable, cross-functional system of information transfer. However, innovations from key players like Loom Network with their Basechain protocol are key in driving the entire ecosystem forward and increasing cross-functionality amongst various players involved. 
Even though several key metrics have shown tremendous growth for companies like Loom, the full impact of these platforms wouldn’t be completely realized until their underlying dapps achieve a similar rate of growth once launched too. Cryptoticker and the blockchain ecosystem would stay tuned for such updates and the blockchain community is bound to benefit from positive news in this space.