Ethereum Makes Changes to Scale Faster
Ethereum recently reached its highest value to-date. Now, Ethereum is looking to scale faster amidst skepticism about Bitcoin’s ability to sustain its growth.
Since the beginning, Ethereum presents itself as far more than just an alternative to Bitcoin.
Ethereum is not only a currency, it’s a technological advancement that has the potential to affect everything from the legal industry, to the way that software functions. Now, Ethereum is processing more transactions than all other digital currencies combined.
On the 26th of November, 2017, Ethereum handled over 561,000 transactions, beating its previous record.
In spite of Bitcoin still being the world’s most popular digital currency and recently reaching its highest price to-date, it processed around 310,000~ transactions in the same timeframe as Ethereum.
Ethereum carrying out more transactions than its contemporaries can be attributed, in part, to the currency’s processing speed and lower transaction fees.
As Bitcoin’s growth continues to push the limits of its block size, the price of its transactions rises.
While it is currently cheaper to conduct transactions with Ethereum, it’s important to account for the fact that Ethereum is still in its early days. If Ethereum were more popular, experts worry that its transaction fees and processing times would face a similar upward trajectory.
Neither Ethereum nor Bitcoin will be able to sustain their grown in their current state, and both currencies are investigating solutions to stay competitive and allow for their continued exponential growth.
Unlike Bitcoin, Ethereum does not have a fixed block size. Instead, the block size on the Ethereum chain dynamically increases or decreases based on usage.
However, future-proofing Ethereum requires more than a dynamic block size. Scaling also relies on combatting Ethereum’s computation requirements, maintaining safety, and remaining decentralized.
With reports that Bitcoin could consume as much electricity as the entire country of Denmark by as early as 2020, Ethereum’s prominent minds identified the need for methods to reduce the technology’s energy consumption.
This is especially important as Ethereum hopes to be more than a currency. Since the Ethereum blockchain serves as the backbone for Decentralized Applications (dApps), smart contracts and similar projects, Ethereum’s scalability is a vital issue.
Vitalik Buterin recently expressed that future-proofing Ethereum is a balancing act between prioritizing scalability, security and decentralization. During a speech at BeyondBlock, an Ethereum meetup held in Taipei, Buterin pointed out issues with the ‘easy methods’ proposed to solve issues within the technology.
During his presentation, Buterin reassured the community that Ethereum aims to scale, “on-chain, to thousands of transactions, without masternodes, consortium nodes, or any centralizing aspects.”
In the context of blockchain, ‘sharding’ would supply an alternative to current blockchain protocols.
In the current system, blockchain works by having each computer in the network store all transaction information during processing. This system is designed around maximizing security, but greatly inhibits the technology’s ability to scale.
This results in Bitcoin being limited to approximately 3-7 transactions a second, while Ethereum is limited to 7-15.
Sharding aims to create a system with enough nodes (computers within the network) to ensure security by confirming the validity of each transaction. At the same time, sharding will have a small enough number of participants for transactions to be processed in unison.
Getting Ethereum to scale
Maintaining security while increasing transaction times is a delicate balancing act, and sharding could play a major role.
Buterin provided insight into Ethereum’s roadmap during Devcon3. At BeyondBlock, he expanded his intent to split ongoing development into two categories: ‘safe and conservative’ and ‘rapid development.’
Splitting the project streams should allow for quicker development without compromising safety on the main project.
As Ethereum races to not fall behind, Buterin emphasize sharding as a key ingredient in sustaining Ethereum’s success. In a TechCrunch Disrupt interview, Buterin said Ethereum aims to have the same transaction capacity as Visa within a few years.
Currently, Buterin’s work on sharding is publicly viewable, and contributors are actively working to develop prototypes of the new system.
Casper and PoS
In the meantime, Vlad Zamfir recently published Casper, a protocol change for Ethereum, following his speech at Devcon3.
If implemented, Casper would change the Ethereum blockchain protocol from Proof of Work (PoW) to Proof of Stake (PoS), which would help to reduce power consumption.
Zamfir’s work has detractors, but proponents believe reducing Ethereum’s energy consumption is vital to its growth.
Proof of Stake implementation could soon be a reality for Ethereum. Additionally, Ethereum’s progress with sharding could drastically shape the future of the technology over the next few years.
Image credit: Ethereum
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