Some developers seem to think that Ethereum can be seen to be more scalable than Bitcoin because it processes slightly more transactions per second. At the same time, because Ethereum’s hash rate is lower and its network might not be as decentralized as Bitcoin, some would consider Bitcoin to be more secure than Ethereum. While other seems to think that One of the core problems with the Ethereum platform has been scalability. As more decentralized apps use the platform, and transactions increase exponentially, so do the gas fees. Simply put, if too many users are on the blockchain gets more expensive to buy and sell things.

I can help but wonder how Ethereum 2.0 scale better than Ethereum 1.0. One of the main reasons for the upgrade is scalability. The current Ethereum network can only support around 30 transactions per second; this causes delays and congestion. Ethereum 2.0 promises up to 100,000 transactions per second – Interesting!

SCALING OVERVIEW

As the number of people using Ethereum has grown, the blockchain has reached certain capacity limitations. This has driven up the cost of using the network, creating the need for “scaling solutions.” There are multiple solutions being researched, tested and implemented that take different approaches to achieve similar goals.

The main goal of scalability is to increase transaction speed (faster finality), and transaction throughput (high transactions per second), without sacrificing decentralization or security (more on the Ethereum vision). On the layer 1 Ethereum blockchain, high demand leads to slower transactions and nonviable gas prices. Increasing the network capacity in terms of speed and throughput is fundamental to the meaningful and mass adoption of Ethereum.

While speed and throughput are important, it is essential that scaling solutions enabling these goals remain decentralized and secure. Keeping the barrier to entry low for node operators is critical in preventing a progression towards centralized and insecure computing power.

(Excerpts from Ethereum.org)

Four Developers shared their thoughts with us.


Marcellus Ifeanyi
Software Engineer | BlockChain Developer | Smart Contracts | Quant & Chartered Trader 📊 | Realtor | Energy Systems ♻️ | STEM

The Scalability 1.0 gives rise to side chains and Roll ups like the Polygon.

Also, the upcoming Ethereum 2.0 is aiming to solve the scalability issue and increase the transactions speed

As the number of people using Ethereum has increased, the blockchain has reached certain capacity limitations. This has driven up the cost of using the network, creating the need for “scaling solutions.” There are multiple solutions being researched, tested and implemented that take different approaches to achieve similar goals.

So How to Scale Ethereum Ecosystem

As of now we have 2 types of solutions for scaling

  • On-Chain Scaling
  • Off-Chain Scaling

On Chain Scaling

  • Sharding is the process of splitting a database horizontally to spread the load.
  • In an Ethereum context, sharding will reduce network congestion and increase transactions per second by creating new chains, known as “shards.”
  • This will also lighten the load for each validator who will no longer be required to process the entirety of all transactions across the network.

Himanshu Singh : Blockchain Developer

Off Chain Scaling

Layer-2 Solutions

Other Solutions(Creation of New Chains)

  • SideChains : Side chain is an EVM-compatible blockchain which runs in parallel to Mainnet 
  • Validium  : A Validium chain uses validity proofs like zero-knowledge rollups but data is not stored on the main layer 1 Ethereum chain.
  • Plasma Chains : Plasma chain is a separate blockchain that is anchored to the main Ethereum chain, and uses fraud proofs 

Peter Otobong : Blockchain Developer | Product Manager

“To begin with, Eth 1.0 is not scalable which is why Eth 2.0 is currently being discussed on the upcoming merge. Primarily the intent is to revamp the approach to consensus because consensus is the biggest reason Blockchains don’t scale as conventional infrastructure. If Ethereum continues the way it is, more and more Dapps are going to favour newer chains such as polygon, BSC, Cardano etc which is already the case. A lot of work has already been done to improve the current system but there’s a threshold to that. The only way it’ll become more scalable is an entire revamp of its current infrastructure. Hopefully, we get to see that in Eth 2.0 but as of now it’s not scalable in terms of throughput, TPS or as an option for building bigger Dapps, especially with exorbitant gas fees”

Mau Pan – Cofounder Lunar Digital Assets

Ethereum does indeed have a problem with scaling similar to what we have seen with Bitcoin. Still, in its infancy, the most popular smart contract platform needs to establish an infrastructure that can be used by billions around the world without security or scaling concerns.

One prime example of its scalability issue was brought forth with a simple game built on the Ethereum platform called CryptoKitties.

When it first launched, the sheer number of transactions from users buying and selling kitties on the network caused a substantial amount of congestion on the network.

What caused the massive amount of congestion in the Ethereum network?

At its current state, ethereum can only process around 15 transactions per second. Compared to Visa’s 45,000 transactions per second, this is definitely not a scalable amount, especially when a single DApp is able to congest the entire network.

This is because for blockchains like Ethereum, every transaction and smart contract needs to be processed by every single node in the network. As you can imagine, this puts a massive limit on Ethereum’s transaction throughput, as it can only be as high as the work required from an individual node.

Another reason is because every DApp built on the Ethereum platform uses the same blockchain. Since there was an incredibly high amount of network transactions happening with CryptoKitties, the other DApps on the Ethereum platform became congested and slow as well.

This in turn, required a higher amount of Ether gas to be used to run transactions or contracts on the network. Since there were so many transactions occurring at once, users were now competing for transaction speeds by sending larger amounts of gas. The miners on the network would automatically process the transactions which sent higher amounts of Ether gas as they would be more profitable than those with a lower amount.

The CryptoKitties incident highlights the fact that blockchain tech still has a lot of room for improvements, specifically in the scalability aspect.

What are some of the potential solutions for Ethereum’s scalability issues?

One of the ways Ethereum is proposing to solve this scalability issue is with a solution called sharding.

Let’s refer back to the concept with how every transaction and contract needs to be processed by every node in the network. Instead of each transaction having to go through every single node, sharding allows the entire state of the network to be split into partitions called shards, which each contain their independent piece of state and transaction history.

This allows for transactions to be processed by the nodes in the shard, rather than having to be processed by every single node on the network.

You can read an in-depth guide on how exactly sharding works as well as some of its pitfalls in this Medium article here.

Another scaling solution Ethereum has proposed is Plasma, a channel to conduct off-chain transactions while relying on the Ethereum blockchain to ground its security.

Similar to Lightning Network, a scaling solution for Bitcoin, Plasma is a series of child blockchains which run on top of a root blockchain, in a Merkle tree.

Data commitments are broadcasted periodically from the child to the root blockchain. To combat attacks or bad actors on the network, child chains can do a mass-exit to the root chain.

So plasma is essentially a tree of blockchains, ensuring faster transactions due to not having to propagate all the network data to every party. Along with built-in fraud protection due to mass-exit capability and a single root chain acting as the “source of truth”.

Expanding on Plasma, Vitalik Buterin presented Plasma Cash at the Ethereum Community Conference on March 9. This further improved on scalability as well as security issues that Plasma has. The vision for this is that exchanges could insure losses and gains directly through Plasma contracts, making them potentially hack resistant.

Learn more about the Plasma framework by reading their whitepaper here.

The trade-off between scalability and security is one that is constantly brought up with different cryptocurrencies including Bitcoin (the block-size limit debate) and Ethereum (as discussed in this answer). How we plan to solve these issues as blockchain continues to be developed will be integral to the global adoption and use of these technologies.

The world’s second most valuable cryptocurrency, Ether, has been touching all-time highs in price ahead of a major upgrade of its underlying platform, Ethereum.Ether is currently worth in aggregate just shy of US$500 billion (£363 billion). That’s still slightly less than half that of the biggest cryptocurrency, Bitcoin.

But could this upgrade, a vital step towards a much greener and faster version of the current system, put Ethereum on the path to becoming the dominant platform on the internet and make ether number one? First of all, it’s important to understand the difference between Bitcoin and Ethereum. Bitcoin is a system for allowing people to send value between one another without the need for banks. It is built on a technology known as blockchains, which are online ledgers whose transactions are checked and recorded by a decentralised network of computers known as validators. Ether works in a similar way to Bitcoin, but Ethereum is different. It is a worldwide software platform with no host, on which developers are building thousands of blockchain-based applications.

Why Ethereum 2.0 ?

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