TradeConnect will use a hybrid blockchain–server system that will take advantage of the benefits of distributed ledger technology, whilst at the same time overcoming its limitations, namely, scalability.

Let’s take a look at the reasons for this approach.

As we are building on the Ethereum network, a full blockchain implementation would need two seperate smart contracts for each transaction — one for the market maker creating the offer, and another for the counterparty accepting the offer. Each transaction would need to be mined and assigned to a block, and whilst this can in principle take place in seconds, when the network is under high load and scaled to the widespread adoption we expect this technology to grow to, transaction times can become a hugely limiting factor.

Whilst we fully expect the Ethereum network to develop to overcome current scalability issues, and in the future we’re looking forward to integrating solutions such as Plasma into our ecosystem, we think it’s important that TradeConnect is fully operational as a fast and efficient trading network from minute one.

To achieve this, we’re offloading the bulk of the operations to an offline private blockchain. Only finalized transactions will be committed to the public Ethereum blockchain, resulting in a fast and always reliable service.

Private blockchains often suffer from the same limitations as centralized systems, but we will be able to avoid undue control over the system through the use of a pool of pricing Oracles. Over time, this network will expand to include an election system, which will ensure a fair and democratic service.

It’s a complex system that requires much more space in order to explain fully, but we hope this article has shone some light on the hybrid system TradeConnect is building and the reasons for this approach.

To learn more, please check out our website, whitepaper and faqs, or ask a question through any of our social media channels.

We are always online on Telegram should you want to reach out :)