Vitalik Buterin is the Russian born, Canadian-raised founder of the Ethereum network. Developed in Canada in 2013, it has since taken the world by storm, rising to dominate the cryptocurrency market and second only to its ‘big brother,’ Bitcoin.

Before Ethereum, blockchains were designed with limited functionality. Buterin’s breakthrough with Ethereum was designing it in a way that it could operate as a platform for other developers to add their own functionality through applications that run on the Ethereum network.

A good way to visualize how the Ethereum network runs all these applications is by looking at smartphone app networks.

A smartphone is designed by the manufacturer to have a limited functionality, but independent developers can design their own applications to run on the phone. The user of the phone can then decide how to modify the way they interact with their smartphone by installing any number of apps that run on the phone.

A modest proposal

At the recent Devcon3,  Buterin announced his new roadmap for the future of Ethereum in what he called a “modest proposal”. Devcon3 is a 4-day conference hosted by the Ethereum Foundation, featuring many speakers who are on the forefront of research and development for the Ethereum network.

Buterin’s modest proposal laid out a plan to overcome some key issues for the future of Ethereum, namely scalability, security, usability and environmental impact. A plan that would take Ethereum, over the next 2 to 4 years, from where it is now to what he referred to as Ethereum 2.0.

Ethereum’s scalability solution: “Sharding”

As the number of users on a blockchain increases, so does the number of transactions it needs to make. In order for Ethereum to reach its potential, Buterin and his team have to address the fact that the current iteration Ethereum will not scale up to allow for the future demands on the network.

His plan to overcome the scalability issues is what Buterin calls “sharding.”

Currently, running a full Ethereum node requires a user to download the entire blockchain, which slows down the network. Buterin’s plan is to change that so that each user would only need to download a portion – or ‘shard’ – of the blockchain, in order to increase the speed of the network.

This concept is not entirely new to blockchain technology, but the issue in the past has been figuring out how to implement it in a way that maintains the security and robustness of a decentralized blockchain.

Buterin was happy to announce his team has a working model for this innovation but said there would be more testing needed before it is deployed onto the Ethereum network.

Proof of Stake vs. Proof of Work

Buterin also outlined his proposal to change the network from a Proof of Work network to a Proof of Stake network.

In a Proof of Work system, most cryptocurrency networks have been controlled by miners who donate computational power from their computers to maintain the network and in return receive a portion of the new coins generated. However, the Proof of Work method uses more electrical power than Proof of Stake, making the switch to a Proof of Stake network more environmentally friendly.

A Proof of Stake system is designed so that people can ‘stake’ their coins and in return, they are paid a percentage of the new coins generated by the network, much like a stock dividend or interest payment.

A Proof of Stake system would also increase Ethereum’s protection against hacks. Any coins staked on the network by a user who attempted to manipulate or hack the network would be forfeited, which provides an additional incentive for users to remain honest.

Slow and steady progress

Buterin concluded by announcing upgrades to the Ethereum Virtual Machine (EVM), technology used by developers to compile Ethereum applications and run them on the network.

On top of those updates, he announced that the Ethereum team is close to finalizing the development of E-WASM, a Web Assembly technique meaning a developer can use a web browser to compile and communicate with the Ethereum Network.

With the conclusion of his announcements, he acknowledged the need to upgrade the network slowly to minimize the need for hard forks. He also pointed out the need for stability in the code of the network, adding that it would be hard for developers to work inside the Ethereum framework if the core code was changing drastically and frequently.

 

Image credit: Ethereum

 

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