Importance of scalability

Scalability is critical when evaluating blockchain systems because it directly impacts the practical utility of the system. As the scale of a system grows, so does its capacity to support a wider variety of applications and use cases. The more users and applications a blockchain can effectively support, the greater its practical utility becomes. If a blockchain cannot scale effectively, it significantly limits both its usefulness and the range of potential applications. The central obstacle to scaling distributed systems, including blockchains, is state management— the data reflecting the current status of the system, such as account balances, transaction records, and interdependent information. Stateless systems scale trivially, but systems maintaining complex state face significant challenges as transaction volumes increase. The more complex the state information becomes, the more coordination and communication are required among nodes, leading to performance bottlenecks and limiting overall scalability. This scaling challenge is deeply tied to the constraints described by E. Brewer’s CAP theorem[2], which states that distributed systems cannot simultaneously guarantee consistency, availability, and partition tolerance. Blockchain systems must inherently maintain partition tolerance to function during network disruptions, forcing them to manage trade-offs between consistency (ensuring all nodes share a unified view of state) and availability (maintaining continuous operation despite node disruptions). Prioritizing consistency ensures atomic updates across the network at nearly the same time but requires that all nodes be reachable, meaning that the system cannot operate during a partition. In contrast, prioritizing availability allows the system to remain operational even if some nodes are offline, but this approach may lead to temporary inconsistencies during a partition. As a result, transactions or operations that participants believed were successfully completed may be undone or invalidated due to the lack of global consistency in the partitioned system state being not globally consistent. Thus, managing state effectively within the constraints of the CAP theorem is fundamental to achieving scalability. Striking the right balance between consistency, availability, and transaction throughput enables blockchain systems to scale effectively, supporting diverse and demanding applications in a reliable and performant manner.