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How Will Ethereum Scale?

Currencies / BlockChain Aug 22, 2018 - 05:18 AM GMT

By: David_Milsont


Like most public blockchain technologies, Ethereum works to support as many users as possible. The only problem, nowadays, is that the limits of the platform are still being explored. As there is a hardcoded limit on per block computation, the Ethereum blockchain supports around 15 transactions in one second. Developers and academics continue to discuss how blockchain and ethereum systems are being scaled. While Ethereum developers can highlight how this flexible platform differs from bitcoin, there is no consensus yet regarding scalability.

Scaling: The Challenges and the Opportunities

Ethereum and bitcoin use techniques and incentives to ensure one accurately records who knows what without a central authority. It is important to preserve the balance while growing number of users. This is on account of the fact that the digital currency depends on a network of nodes. Each node stores the complete Ethereum transaction history and the present state of contracts, storages and account balances.

This in itself is cumbersome because the total number of transactions increases 10 to 12 seconds with every new block. If developers raise the size of every block to fit more transactions, the data each node needs to store must grow larger, kicking people out of the network. In case each node grows large enough, few companies with large resources can run these. Despite this, running full nodes yield privacy and security even though this can limit the people who can verify the transactions themselves, too.

Tackling Scalability

Ethereum scaling projects are turning these challenges into opportunities. One problem is that each node needs to store an updated account states on the network. Sharding draws from traditional techniques known as database sharding, which breaks database into pieces and puts each part on a separate server. The move is from requiring full nodes; each node stores a data subset and only verifies these transactions.

If the node should know about transactions or blocks that do not store, then it finds another node with the information required. Ethereum solves the problem through incentives that are crypto economic, driving actors within the system to behave in a certain way. This ensures nodes pass on the required data to other nodes.

A more ambitious capability expanding technology for Ethereum scaling borrows from the Lightening Network associated with the multi-layered internet. Off-chain transactions could, lightning style, bring the technologies closer to what the users require. These transactions are made on off-chain micropayment channels, taking away the burden from the blockchain beneath. Any party kicks the transaction back to blockchain and gives parties the chance to end the interaction.

How Long Will It Take to Scale?

This is the biggest question, as a lot of experiments are taking place. Long-term goals for the platform should be able to process transactions at more complex levels. Ethereum needs to scale to the growing demand and solutions range across the sharding, Plasma and Raiden network. Nodes and transactions can be broken into smaller groups with sharding, thereby increasing transaction capacity. State channels are used by offchain solutions like Raiden. This takes the transaction off the network and validates the cryptocurrency only when required. Plasma is the creation of Joseph Poon and uses side-chains. The benefit is the removal of non-required data in the root chain and will only broadcast completed transactions to the network. It can be used with sharding to ensure network security.

New advancements such as Plasma Cash have mitigated risks to how plasma chains communicate within the Ethereum blockchain. While new architectures arrive, Ethereum will be added to it easily. This will pave the way for easy and effective scaling. The way ahead for Ethereum holds promise, as new scaling technologies are coming to the fore.

Disclaimer: “This article was contributed by the CEO of Blackmore Group, Phillip Nunn. Entrepreneur, financial expert, corporate evangelist, fintech and crypto trading authority, Phillip is an industry speaker and renowned thought leader on topics such as Fintech, Cryptocurrency and Blockchain technologies. Follow his blog at

By David Milsont

© 2018 Copyright David Milsont - All Rights Reserved

Disclaimer: This is a Paid Advertorial. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2018 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

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