The Bitcoin problems, considered in Prizm.

Prizm was created as a cryptocurrency 2.0 - response to Bitcoin. Prizm uses functions that are well established in Bitcoin, and consider the aspects of concern. This application addresses issues with the Bitcoin Protocol and network that are smoothed out by Prizm technology.

Blockchain Size

The Bitcoin Blockchain is a complete sequential collection of the generated data blocks containing the e-book registers all Bitcoin transactions that have taken place since its launch in January 2009th. Four years later, in January 2013th, Bitcoin's blockchain size was 4 gigabytes (GB) - the approximate amount of data needed to store a two-hour movie on a DVD. Eighteen months later, in July 2014th, the Bitcoin blockchain size increased by almost five-to 19 gigabytes (GB) 37. Bitcoin blockchain is undergoing exponential growth, and modifications to the original Bitcoin Protocol will require a solution to this.

About of transactions per day

By the end of 2013, the number of transactions processed in the Bitcoin network reached a maximum of 70,000 per day, which is about 0.8 transactions per second (tps). The current standard Bitcoin block size of one megabyte, generated (on average) every ten minutes on the "full" site of customers, limits the maximum bandwidth of the existing Bitcoin network to about 7 TPS. Compare this with the bandwidth of the VISA network to handle 10,000 TPS, and you'll see that Bitcoin can't compete as it exists today.

Answer of PRIZM

In its current state, Prizm can handle up to 367,200 transactions per day - more than nine times the current Bitcoin peak. The Transparent Forging implementation allows transactions to be processed almost instantly, significantly increasing this limit.

Time to confirm transaction

Transaction confirmation time for Bitcoin ranged from 5 to 10 minutes for the most part during 2013. At the end of 2013 after the announcement that Chinese banks would not be allowed to process Bitcoins, the average Bitcoin transaction time increased significantly, to 8-13 minutes, with periodic peaks of 19 minutes. Since then, the confirmation time has shifted from 8 to 10 minutes. However, since several checks (usually six preferred confirmations) are required to complete a Bitcoin transaction, one hour can easily pass before the sale of assets paid by Bitcoin is completed.

Answer of PRIZM

The average block generation time for PZM has historically been 80 seconds, and the average transaction processing time was the same. Transactions are considered safe after ten confirmations, which means that transactions become permanent in less than 14 minutes. The implementation of Transparent Forging allows you to make almost instant transactions, which will further reduce this time.

Problems of centralization

The complexity increase along with the hash rate for Bitcoin have created a high barrier for entry of newcomers, and lower profits for existing mining installations. The incentive to encourage blocks used by Bitcoin has led to the creation of large single-tier installations of specialized mining equipment 44, as well as reliance on a small set of large mining pools 45. This led to the effect of “centralization", where Large volumes of mining are concentrated in the control of a decreasing number of people. This not only creates the kind of power structure that Bitcoin has designed to bypass, but it also presents the real possibility that a single mining operation or pool can gain 51% of the total mining capacity in the 46 network and perform a 51% attack. There are also attacks that require only 25% of the total network hashing power. In early January 2014 began to voluntarily reduce the power of its own mining, as it approached the level of 51%. A few days later, the power in the pool decreased to 34% of the total capacity of the network, but the speed immediately began to increase, and in June 2014 again reached dangerous levels.

Answer of PRIZM

The incentives provided by the Proof of Stake algorithm used in Prizm provide a low return on investment of about 0.1%. Since new coins are not generated with each block, there is no additional “reward for mining", which stimulates the joint efforts to create blocks. The data shows that the Prizm network has remained very decentralized since its inception: a large (and growing) number of unique accounts adds blocks to the network.

Proof of Work - maintenance costs

Confirmation of transactions on existing bitcoin and creation of new bitcoins for entering into circulation require enormous computing power, which has to work constantly. This computing power is provided by the so-called mining rigs, which are managed by miners. Bitcoin miners compete with each other to add the next block of transactions to the overall bitcoin chain. This is done by "hashing" - combining all Bitcoin transactions occurring within the last ten minutes, and trying to encrypt them into a block of data, which also coincidentally has a certain number of consecutive zeros in it. Most trial blocks generated by hashing miners do not have this target number of zeros, so they make small changes and try again. A billion attempts to find this "winning" block is called GH, and Mining rig is estimated by how many GH it can perform per second, denoted by GH / sec. The winning miner, who was the first to create a cryptologically correct block of Bitcoin, immediately receives a reward of 25 new bitcoins - the reward at the time of writing was about 15 750 US dollars. This competition among miners with the award is repeated again and again every ten minutes or so. By the beginning of 2014, more than 3,500 bitcoins a day, equal to about $ 2.2 million a day, had been generated. With so much money on the bet, miners supported the rapid arms race in mining rig technology to improve their chances of winning. Initially, bitcoins were mined using a Central processor (CPU), a typical desktop computer. Then in order to increase the speed the chip of a specialized graphics processing unit (GPU) in high-end graphics cards was used. Then the microprocessor with programmable gate array (FPGA) and then the chip of specialized applied integrated circuits (ASIC) were used. ASIC technology is the pinnacle of the line for bitcoin miners, but the arms race continues with the advent of different generations of ASIC chips.

The current generation of ASIC chips is the so-called 28 nm devices based on the size of their microscopic transistors in nanometers. They have been replaced by 20nm ASIC modules by the end of 2014. An example of a new state of the art mining rig would be a 28nm ASIC card "the Monarch" from Butterfly Labs, which is to provide 600GH / sec for an electricity consumption of 350 watts and a price of 2,200 USD. The mining rig infrastructure, which is currently being used to support Bitcoin's current operations, is striking. Bitcoin ASIC is similar to autistic scientists - they can only perform the calculation of a block of bitcoins and nothing more, but they can do it with one calculation at the speeds of a supercomputer. In November 2013, Forbes magazine published an article titled " global bitcoin computing power is 256 times faster than 500 combined supercomputers!". In mid-January 2014, the statistics stored on the site, showed that the continuous support of Bitcoin operations requires a continuous hash rate of about 18 million GH / s. Within one day, this hashing power produced 1.5 trillion trial blocks, which were generated and rejected by Bitcoin's mayonnaise, in search of one - magical 144 blocks that will cover them $ 2.2 million. Almost all Bitcoin calculations are not aimed at fixing the disaster by modeling DNA or searching for radio signals from E. T.; Instead, they are completely wasted. The power and costs associated with this wasteful Bitcoin background support are enormous. If all Bitcoin mining rigs had "Monarch" levels, as described above - and they will not be until they are upgraded - they will represent a pool of 30,000 machines worth more than $ 63 million. It consumes more than 10 megawatts of continuous power during operation and the electricity Bill is more than $ 3.5 million per day. The real figures are much higher for the current, less efficient mining rig pool of machines that actually support Bitcoin today. And these numbers are now going up the exponential growth curve as bitcoin marches from its current one transaction per second to its current maximum of seven transactions per second.