Scalability in Blockchains: Solutions and Best Practices

By Olaleye Komolafe
9 Min Read

Today, blockchain has grown to become an underlying technology of digital assets, relegating the traditional banking system. In recent times, its usage has cut across all spheres within the financial arena and beyond. It runs as a decentralized network which helps to track data in a virtual ledger. Through this, the technology is able to provide transparency, security and many more in a given ecosystem. However, to perform all these functions optimally, it is important that a blockchain network possesses high scalability. To know more about blockchain, click here.

It is worthy of note that blockchain offers limitless opportunities particularly in the financial setting. For a blockchain network to meet up to its expectations, it must be able to process loads of transactions per second. This is called blockchain scalability. Over time, different blockchain networks have adopted numerous solutions to enhance their respective scalability, thus increasing the amount of transactions they can process per second. This article is going to examine the various blockchain scalability solutions. 

What is Blockchain Scalability?

Blockchain scalability has to do with the capacity of a network to process a load of transactions, store data and increasing the number of nodes running in the network. In simple terms, blockchain scalability is related to transaction speed. A blockchain network is said to be highly scalable if able to process a high volume of transactions very quickly. Scalability is one of the “trilemma” terminologies developed by the co-founder of Ethereum, Vitalik Buterin while explaining the challenges of blockchain. The other two that make up the “trilemma” term are decentralization and security. However, our purpose in this article is scalability.


Certainly, we can define the capacity of a blockchain through its scalability level. It cuts across the number of transactions that can be processed by the blockchain, how fast it can process those transactions and many others. According to our findings, blockchain scalability can be divided into three phases; namely execution, storage and consensus. For the purpose of understanding, the three phases shall be discussed below:

Notably, execution has to do with the amount of computation necessary to implement transactions in a given blockchain network. Simply put, it entails verifying the authenticity of those transactions and implementing the on-chain logic required to perform state changes. It is worth mentioning that state changes occur when full nodes update their copy of the ledger to illustrate token transfers and data storage.

Accordingly, we can also relate the execution of blockchain scalability to transactions per second (TPS). But, it majorly deals with the amount of computation per second. The relationship is that the higher the transactions running on a blockchain network, the higher the computation requiring execution.


The second phase of blockchain scaling is storage. This has to do with the storage essentials of those full nodes necessary to sustain a copy of the ledger on the blockchain. Blockchain storage in this perspective comes in two categories; namely historical data and global state. According to our findings, historical data entails raw transactions data in a network, which include source of the transaction, destination, amount of the asset transferred and signature attached to each transaction. Global state on the other hand entails the snapshot of all the data readable by smart contracts on the blockchain network. This storage form is mostly regarded as the database of the network. It is necessary for validating upcoming transactions.


The third phase of blockchain scalability is consensus. Notably, Consensus has to do with the process by which nodes running in a given network agree on the state of the network. The concept of consensus takes shape in a blockchain in the quest to achieve absolute finality. It is worthy of note that the consensus mechanism running in a network is instrumental in determining the level of scalability, security and decentralization of a blockchain network. This thus explains the importance of consensus mechanisms to the performance of a blockchain.

How are Blockchain Networks Solving Scalability Issues

Today, one of the major challenges associated with blockchain is scalability. To solve this challenge, these networks have started to adopt numerous solutions and practices, thereby aiding their scalability. For the purpose of this article, some blockchain networks will be examined to see how they are solving their scalability issues. 


Notably, the Bitcoin blockchain is designed to run like a ledger. As the native blockchain of the largest crypto by market cap, the network logs any transactions carried out with its crypto without the control of any third party. According to its whitepaper, the blockchain is distributed, verifiable and encrypted. Over the years, the network has been engrossed with scalability issues to the extent that it sometimes takes hours to process growing transactions. 

It is noteworthy that the blockchain network has shown a remarkable commitment to addressing this issue. One of its efforts is by adopting a scaling solution, called Segregated Witness (SegWit). Prior to its execution on Bitcoin, SegWit was first implemented on Litecoin. Accordingly, the solution is designed to primarily enhance transaction throughput on a blockchain. It helps to drastically reduce the weight of transactions in a block. The solution achieves this by separating a transaction into two sections, thereby enhancing scalability.

Our findings confirmed the implementation of SegWit by Bitcoin as its first effort towards achieving scalability. The blockchain network leverages the solution to function quickly and more efficiently. SegWit is notable for making blocks on the network smaller and ensuring that transactions are processed more faster. Also, prior to the implementation of SegWit on Bitcoin, there is a flaw on the network that paves the way for its users to alter transaction hashes. However, with the presence of the solution, it is simply impossible for users to change transaction ID on the network to deceive sender to send assets twice. This thus reduces the risks associated with sending assets on the network.


No doubt, Ethereum has grown to become one of the leading blockchain networks across the globe. In a bid to address the “trillemma” associated with blockchains, the network has in recent times, embarked on numerous upgrades. One of its recent upgrades is its transition to proof-of-stake from proof-of-work. The upgrade was regarded as the Ethereum Merge. Worthy of note that this upgrade can be described as one of Ethereum’s biggest efforts to achieving better scalability. 

By migrating to proof-of-stake, Ethereum has been able to improve its throughput. This is because the upgrade replaced miners with validators, thereby altering the initial block validation tradition. Notably, validators on the network are expected to first stake their ETH assets to contribute to the optimal performance of Ethereum. This thus makes them eligible to validate blocks to be added to the network.  


Amid the growing use cases of blockchain technology, the importance of scalability cannot be underestimated. It is pivotal that blockchain networks are able to process loads of transactions very quickly and effectively to meet the increasing demands. Certainly, the manner in which several blockchain networks have shown remarkable commitment to achieving better scalability is commendable, but they must continue to improve on it to thrive. 

Olaleye is a professional reporter with vast experience in web3, cryptocurrencies, and NFT journalism. He enjoys writing about the evolving metaverse sphere and the prevalence in the crypto sphere. Notably, some of his contents have been published in numerous international publications. Away from the crypto world, Olaleye is a political scientist and a lover of football.