Zilliqa (ZIL) Review (UPDATED 2018): A Beginner’s Guide | VKOOL

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Blockchain technology has opened up a lot of possibilities, but as blockchains age and grow larger with use, a problem has popped up: they're getting too big. With increased size comes higher fees and longer network times. Enter Zilliqa, a blockchain service that wants to solve the problem via a process called sharding, allowing a blockchain to maintain its speed and efficiency even as it grows larger and larger.

The way they see it, when their technology is implemented, it could allow Zilliqa to process hundreds of thousands of transactions every second. Zilliqa also plans to release a number of features along with its sharding capabilities, including smart contracts.

Using this helpful guide, you'll learn what Zilliqa is, how it works, and how you can get the most out of it.

Scalability: The Problem

The problem with blockchains is that the more nodes there are, the harder it is to mine coins due to the consensus required to solve the work. In simpler terms, it's easy to come to an agreement with a small group of people, but the larger the group of people grows, the harder it is to communicate, agree, and decide things.

The problem is that the bigger network you have, the slower consensus is to reach, and the quality of it goes down. That's why bigger blockchains like Bitcoin are starting to run into this problem, and the result is that fees are going up and things are going as quick as they once did.

Zilliqa's Solution

Zilliqa proposes to solve the problem by implementing a new, hybridized protocol for consensus that will increase the amount of transactions a network can deal with, and it will increase it for every 600 nodes that are joined to the network. This way, the bigger the network, the more it should be able to handle.

The only upper bound to this practice is if there were, say, a million nodes, at which point the system would become impractical. This isn't going to happen any time soon, though, as the highest number of nodes for a blockchain network is Ethereum's 25,000. Comparatively, it's almost nothing compared to the limit.

In tests, it's been shown that Zilliqa's method can make it so a network can process twice as many transactions per second when you double the number of nodes.

How Sharding Works

Sharding is the way Zilliqa plans to achieve this solution. Here's roughly how it works.

The network is divided into groups of 600 nodes, called shards. Each shard processes a fraction of the transactions on the network. The consensus load is split up evenly among shards, so in essence, each node is a mini-network that can complete transactions on its own.

By breaking the work up into smaller nodes, there's no extra tax on network processing time.

To use an example, say you had to write 100 letters. Say it'll take 5 hours to write all the letters. If you suddenly have to write 500 letters, you could give the work to four other friends and write the same amount of letters in the same amount of time, with the same effort expended. Sharding works the same way.

Each shard's fraction of the blockchain gets added together at the end, and thus ends on “DS Epoch.”

Managing Shards

There are committees that are set up to manage each shard, called “DS Committees.” They make decisions about which nodes are assigned to shards. Transaction requests pop up, and the committee assigns them to shards. When the shard finished processing their transaction, the DS Committee forms the block in the chain from the fractions sent in by each shard.

Consensus

As mentioned before, Zilliqa uses a hybrid consensus protocol. When a miner begins work, they have to finish a proof-of-work hash for identity, which requires processing power and limits them to one node. This isn't how consensus is achieved, though.

Once the miner/node proves its identity, it's assigned to a shard. All the nodes must agree on the solution to the miniblock equation, whereupon they will reach consensus with finality – basically, it becomes the sole block that can exist after the one before it, preventing forking. This is called the Byzantine Fault Tolerance consensus.

Contracts and State Sharding

While it's simple to divide work up among shards to process transactions, it's not so easy to do the same thing with smart contracts and apps.

Why? Smart contracts need to keep check on different functions and states within a system to make sure conditions are being met, but doing so with a sharding system would mean shards would have to communicate with each other constantly, raising the need for bandwidth.

Zilliqa doesn't allow these functions for this reason, preferring to focus on data flow and programming. However, it can be used for apps that process a lot of data that can be divided up among shards, since it would require as much communication between them.

Scilla – The Zilliqa Programming Language

To make things more secure and standardized, Zilliqa has developed Scilla, a programming language that separates function from state, which helps with the sharding “state” communication problem we mentioned in the section above.

Going forward, this language could prove useful in coming up with applications that can work with the Zilliqa platform. Other languages so far don't necessarily have the ability to do this, and it'll be interesting to see where Scill goes from here.

How ZIL Works

Like most other blockchain platforms, Zilliqa has its own internal token, the ZIL. It's used to pay transaction fees, contracts, and is offered as a reward for mining.

Right now it's ERC-20, working on the Ethereum blockchain. However, once Zilliqa launches, it'll have its own native coin that isn't ERC-20 compliant, so you will need to exchange your ZIL for the new coin when that happens. It's not clear whether the tokens will still be traded after launch, or if they will be bought up and destroyed by Zilliqa.

You can currently purchase ZIL on EtherDelta, Huobi, and Gate.io, three of the bigger exchanges out there.

The Team

Like many blockchain startups, Zilliqa is being developed by a team with a heavy background in computer science. Xinshu Dong is the CEO, a computer science doctorate who's developed security projects for the Singaporean government. Prateek Saxena is Chief Scientific Adviser, and currently teaches at the National University of Singapore.

There's also an advisory board that's populated with lots of big names in the blockchain community, including Loi Luu (who co-founded Kyber Network) and Nicolai Oster, a partner at Bitcoin Suisse AG.

Zilliqa vs Ethereum

These are two fairly different systems. Both are blockchain-based, but they approach it in different ways. Zilliqa is founded primarily on the principle of solving the scalability problem of larger blockchains. Ethereum is working on a similar workaround, but right now they exist as a regular blockchain that works on proof of stake. Zilliqa hasn't launched yet, while Ethereum has been around for a few years and is one of the largest blockchain projects in the world. Both have their own currency, but Ethereum's is the one that shares the top spot in popularity, rivaling Bitcoin.

Zilliqa vs Cardano

These blockchain projects are different in their focus. Zilliqa is focused on scalability in blockchains, while Cardano focuses on decentralization and advanced smart contract technology. By contrast, Zilliqa likely won't even support standard smart contracts. Cardano is also a cryptocurrency project, while Zilliqa's currency serves more as an internal token than a true cryptocurrency like Ada or Ethereum. Cardano has the advantage of already being out and implemented, while Zilliqa has yet to be released.

Zilliqa vs Eos

These platforms are both focused on solving the problem of blockchain scaling for large-scale adoption. Zilliqa operates on using “shards,” groups of nodes, while Eos spreads operations out among a large number of CPUs. Both currently have ERC-20 tokens which can later be redeemed for in-platform tokens that will be used to pay for transactions. Neither of these platforms are out, yet, but are currently in the development stage.

Frequently Asked Questions

  1. Where can I buy Zilliqa?
    You can buy it at Huobi, Gate.io, and EtherDelta.
  2. Is Zilliqa an exchange?
    No, it's a blockchain platform that supports apps, transactions, and mining.
  3. What is the Zilliqa token?
    The Zilling, or ZIL for short.
  4. Is Zilliqa a coin?
    It's the name of the service. The coin is the Zilling.
  5. How does Zilliqa mining work?
    It has a hybrid system of proof of work and Byzantine Fault Tolerance.
  6. What's the price of Zilliqa?
    Last we saw, it was around $0.05.
  7. When was the Zilliqa token sale?
    November, 2017.
  8. Is Zilliqa on Reddit?
    Yes, there's a community for it there.
  9. Does Zilliqa have a Twitter?
    Yes.
  10. Where can I read a review of Zilliqa?
    You can read reviews on Medium, Reddit, and on crypto blogs.
  11. Can I get Zilliqa on EtherDelta?
    Yes.
  12. Do you know how to buy Zilliqa?
    Head over to an exchange that sells it and buy it there.
  13. Where can I read about Zilliqa news?
    On their Twitter, or at crypto news sites.
  14. Can I get Zilliqa on KuCoin?
    Not at the moment, as far as we can tell.
  15. Is Zilliqa a cryptocurrency?
    ZIL is more of a token, but it could end up having real value like a cryptocurrency.

Conclusion

Zilliqa is trying to tackle a problem which once only existed in theory, but which recently has become reality. With network slowdowns and fee hikes, people will need a technology that is able to bear the load of increasing demand and increasing blockchain size. Zilliqa seems to have the right kind of idea, trying to find a way to scale the use of blockchain technology while keeping the speed and efficiency roughly the same as before. The result could be a groundbreaking reinvention of how blockchains work, and could put Zilliqa on the map as one of the most exciting new platforms on the market.

Peter Lehmann

Peter is a blockchain investor and cryptocurrency writer at Vkool.com. Since 2014 Peter has advised blockchain startups and ICOs on content marketing, strategy and business development.

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