Much of the discussions around layer 1 chains so far have been about designing new consensus algorithms for better scalability. At the same time, very

The State Growth Problem Facing Blockchains

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2021-06-25 12:00:08

Much of the discussions around layer 1 chains so far have been about designing new consensus algorithms for better scalability. At the same time, very little has been written about the state growth problem that layer 1 chains face. Addressing state growth is an underexplored yet critical factor for the long-term success of a layer 1 chain.

A blockchain is a distributed ledger that stores state data such as transactions. State growth refers to how quickly the size of the blockchain is growing. State growth is a serious concern for a base layer chain and potentially an existential threat if not solved quickly, for reasons why we will soon see.

Fortunately, there’s been a lot of research and development going on to solve this issue. In this article, we detail the state growth problem and how it relates to the tragedy of the commons problem in economics. We then explain why the state growth problem matters so much and outline various solutions that core developers are working on right now to address state growth.

The tragedy of the commons is a situation in which individual users with no restrictions will deplete a system’s shared resource. The term originated in 1833 by British economist William Forster Lloyd to describe overuse of common land. In his example, cattle herders share a common parcel of land on which each is entitled to let their cows graze. If a herder puts more than his allotted number of cattle on the shared land, the herder would receive additional benefits but the whole group shares the damage to the shared land. If all herders made this self-interested decision, overgrazing would cause the shared land to be destroyed to the detriment of all.

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