Ethereum Co-Founder Vitalik Buterin Upgrades Plasma Proposal with Plasma Cash
Ethereum co-founder Vitalik Buterin is constantly innovating his blockchain and smart contract technologies. At the Ethereum Community Conference in Paris on Friday, March 9th, 2018, he introduced Plasma Cash to bring more scalability to the Ethereum blockchain.
Plasma was originally proposed in August 2017 by Buterin and the co-creator of Bitcoin’s Lightning Network, Joseph Poon, as a scaling solution for Ethereum. The technology would enable the Ethereum blockchain to represent a significant amount of decentralized financial applications via incentivized and enforced smart contracts. Further, it introduces proof-of-stake to Ethereum, and has the possibility of creating a decentralized alternative for centralized data farms.
Plasma Cash serves as an upgrade to Plasma that aims to further solve problems of scalability and security, improving on the existing Plasma proposal.
A blockchain scaling solution offering more security
Plasma is a scaling infrastructure designed to allow the Ethereum blockchain to manage larger data sets. Currently, scaling is a massive problem for digital currencies that rely on entire blockchains to process transactions. The problem arises from the process of mining or verifying transactions on a blockchain network, which is both time and energy consuming.
While the Ethereum blockchain is already faster than the Bitcoin blockchain, it still cannot compare with the likes of Visa, for instance, for transaction processing speed.
Like Ethereum, Plasma will handle smart contracts. The change is that Plasma will only transmit completed transactions on the public Ethereum blockchain, as opposed to the existing Ethereum blockchain where every transaction is processed. Plasma optimizes the data transferred, which reduces the amount of time and CPU power. This, in turn, reduces transaction fees and increases the speed of processing. That being said, Plasma still requires users to download and authenticate each block on the chain, which prevents exponential scaling at this time.
The development team and core benefits
Plasma Cash was developed by Buterin and co-developers Dan Robinson and Karl Floersch as a proof-of-stake blockchain model. Unlike Plasma, Plasma Cash creates coins to the value of the Ether transaction with a unique ID.
Plasma Cash only requires users to deal with and verify the blocks related to their coins, which are identified by their place on the blockchain. Users only need to have the proof data of their coin on the Merkle tree – the hash chain behind blockchain verification – and not handle every block on the chain. Needing to have only one’s own user data could reduce speeds and power consumption for the network incredibly.
The second key benefit of Plasma Cash is the increased security which comes from every coin being identified to a specific user. Currently, hackers are able to steal large volumes of digital currency which intrinsically has no identifying factors beyond an anonymous code on the blockchain. With Plasma Cash, users can identify the coins and any theft would be directly from the user, rather than large-scale generic hacks into the blockchain.
Buterin outlined common security breaches in the Paris meeting, demonstrating that legitimate coin owners have the proof of history of their coins and can combat a hack or “exit”. This way, no one can take another user’s coin without the owner of the coin being aware. The identification of coins means that users will be able to withdraw their investment, even if an exchange is hacked.
“Regardless of what happens in the exchange, users can run their money through the Plasma exit procedure and get their money out,” said Buterin.
Wider digital currency blockchain improvements
As of yet, there is no schedule for an implementation of Plasma Cash so far as it’s still in the developmental stages. The proposed upgrades come at a time when a number of digital currency exchanges have implemented Segregated Witness (SegWit) upgrades to the Bitcoin network. The Bitcoin Core client version supporting SegWit was released on February 26th, 2018.
The Lightning Network, an off-chain solution for Bitcoin that runs on top of the Bitcoin network to increase scalability, is also seeing use in 2018.
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