Today seems to be a day of scale, a potential leveling up across the board for both of the leading cryptocurrencies, Bitcoin and Ethereum.

As Lightning Labs has announced that they have released a beta version of the Lightning Network for testing.

Ethereum may also be getting a boost to resolve its scaling issues as well. At least, that’s what a Techstars startup thinks.

The issues of scaling

Scaling issues have been an issue for both platforms for a while now, as the interest in cryptocurrencies grew and more people transacted on both networks in the last quarter of the prior year, both networks saw an increase in its fees as well as a time increase in the processing of payments. Users complained about the rising costs of transferring their satoshis and their ether and feared that they might have conducted their transactions wrongly if they didn’t see the confirmation of the reception of funds.

Of course both projects, Bitcoin and Ethereum have sought to increase their capacities and have stated several times that new implementations are coming. Yet, it has taken some time. Vitalik Buterin did state that scaling, security and other aspects were going to be his priority for this year. As such, the Ethereum Foundation did provide grants to those who met the criteria for research and development in regards to scaling issues.

Vitalik has mentioned other solutions such as sharding, the Raiden Network and Plasma (which will allow for upto a million transactions per second) have yet to be implemented.  This lack of implementation is a significant issue because immediacy is important in the fast paced crypto world.

Potential Solution

It seems though, that a startup incubated by Techstars might have a solution in helping resolve Ethereums scaling issues.

The startup, Loom Network,  is announcing that they will be providing the larger developer community with a developer technical package, that will help to streamline the process of pushing to market, simple, scale oriented Ethereum based applications.

The startup welcomes the user to its website with the statement “Think World of Warcraft and Twitter on the blockchain. Built on Ethereum” inviting the user to click on it’s “First Dappchain is Live!” button.

If what the startup is stating is true, and it seems it is, as they boldly state “we dont write whitepapers, we ship product”, if the development platform delivers, this would potentially significantly help to push the Ethereum community forward.

Loom might just have provided a dappchain solution that can help to minimize congestion, allowing for an increase in the quality of crypto enthusiasts user experience on the Ethereum blockchain network. Indeed, this could mean, no more potential CryptoKitties hiccups.

It is not a solution to the underlying scalability issues of the Ethereum blockchain, these are solutions allowing for the overlay of applications without causing further problems to the current version of the network.

Features and Benefits of the Loom Scaling Solution

Loom states that:

“Blockchains are for more than just financial transactions and that  Loom Network DAppChains are built for Games and Social Apps. Token-based karma, Ethereum-based crypto-collectibles, all based on forkable, decentralized, and human-readable blockchain rulesets.”

Their functionalities allow for the creation of games “that truly cannot be built without the blockchain: provably scarce items, tradable tokens, eternal worlds, and multi-game-spanning universes.”

While allowing for the creation of Social applications as well, allowing builders to make social applications that are not driven by advertisements as it is today but by “karma tokens, expandable via multiple-client appsminimization of trust, and more.”

How does it work?

It seems that a developer can develop an application and then can tap into the Loom Network to use a newly formed sidechain (in a sense) for the deployment of the developers application which becomes integrated with the Ethereum blockchain network.

Of course, sidechains are not necessarily something that is brand spanking new as the concept has has been talked about by projects such as Lisk, Stratis and others. What is new, is the drilled down applications of the concept, brought about by the Loom Network.

It is important to remember that sidechains are supposed to allow for greater scale and flexibility but don’t necessarily automatically bring that scalability to the picture.

A blog published by the Loom Network earlier last year, entitled, “Million-User DApps on Ethereum: An introduction to Application Specific Sidechains” is telling, a key excerpt states:

Sidechains can increase scale but do not imply scalability. Sidechains are no better at providing scalability than increasing block size. What sidechains bring is the ability to experiment. To be able to build networks that run on different — and possibly better-scaling — technology.”

It seems that the Loom Network is bringing about application-specific sidechains to improve the system allowing for increase in scale.

But of course, there’s a catch with sidechains, a decreased level of security from the main chain of Ethereum, these side chains also allow for less transactions that would have to pass through the main blockchain, meaning that Loom will have more control of the picture at the present moment.

Yet, Loom Network states that:

“Loom Network is aiming to be a platform where communities can run their software on sidechains where they all have a vested interest in the platform being provably fair and transparent while being able to adjust their security restrictions on demand.”



The startup has raised in excess of $20 million in a “private token sale and takes a bit of a different approach than other scaling projects” according to Coindesk.