Best of the Week
Most Popular
1. 2019 From A Fourth Turning Perspective - James_Quinn
2.Beware the Young Stocks Bear Market! - Zeal_LLC
3.Safe Havens are Surging. What this Means for Stocks 2019 - Troy_Bombardia
4.Most Popular Financial Markets Analysis of 2018 - Trump and BrExit Chaos Dominate - Nadeem_Walayat
5.January 2019 Financial Markets Analysis and Forecasts - Nadeem_Walayat
6.Silver Price Trend Analysis 2019 - Nadeem_Walayat
7.Why 90% of Traders Lose - Nadeem_Walayat
8.What to do With Your Money in a Stocks Bear Market - Stephen_McBride
9.Stock Market What to Expect in the First 3~5 Months of 2019 - Chris_Vermeulen
10.China, Global Economy has Tipped over: The Surging Dollar and the Rallying Yen - FXCOT
Last 7 days
The Corporate Debt Bubble Is Strikingly Similar to the Subprime Mortgage Bubble - 18th Feb 19
Stacking The Next QE On Top Of A $4 Trillion Fed Floor - 18th Feb 19
Get ready for the Stock Market Breakout Pattern Setup II - 18th Feb 19
It's Blue Skies For The Stock Market As Far As The Eye Can See - 18th Feb 19
Stock Market Correction is Due - 18th Feb 19
Iran's Death Spiral -- 40 Years And Counting - 17 Feb 19
Venezuela's Opposition Is Playing With Fire - 17 Feb 19
Fed Chairman Deceives; Precious Metals Mine Supply Threatened - 17 Feb 19
After 8 Terrific Weeks for Stocks, What’s Next? - 16th Feb 19
My Favorite Real Estate Strategies: Rent to Live, Buy to Rent - 16th Feb 19
Schumer & Sanders Want One Thing: Your Money - 16th Feb 19
What Could Happen When the Stock Markets Correct Next - 16th Feb 19
Bitcoin Your Best Opportunity Outside of Stocks - 16th Feb 19
Olympus TG-5 Tough Camera Under SEA Water Test - 16th Feb 19
"Mi Amigo" Sheffield Bomber Crash Memorial Site Fly-past on 22nd February 2019 VR360 - 16th Feb 19
Plunging Inventories have Zinc Bulls Ready to Run - 15th Feb 19
Gold Stocks Mega Mergers Are Bad for Shareholders - 15th Feb 19
Retail Sales Crash! It’s 2008 All Over Again for Stock Market and Economy! - 15th Feb 19
Is Gold Market 2019 Like 2016? - 15th Feb 19
Virgin Media's Increasingly Unreliable Broadband Service - 15th Feb 19
2019 Starting to Shine But is it a Long Con for Stock Investors? - 15th Feb 19
Gold is on the Verge of a Bull-run and Here's Why - 15th Feb 19
Will Stock Market 2019 be like 1999? - 14th Feb 19
3 Charts That Scream “Don’t Buy Stocks” - 14th Feb 19
Capitalism Isn’t Bad, It’s Just Broken - 14th Feb 19
How To Find High-Yield Dividend Stocks That Are Safe - 14th Feb 19
Strategy Session - How This Stocks Bear Market Fits in With Markets of the Past - 14th Feb 19
Marijuana Stocks Ready for Another Massive Rally? - 14th Feb 19
Wage Day Advance And Why There is No Shame About It - 14th Feb 19
Will 2019 be the Year of the Big Breakout for Gold? - 13th Feb 19
Earth Overshoot Day Illustrates We are the Lemmings - 13th Feb 19
A Stock Market Rally With No Pullbacks. What’s Next for Stocks - 13th Feb 19
Where Is Gold’s Rally in Response to USD Weakness? - 13th Feb 19

Market Oracle FREE Newsletter

The Real Secret for Successful Trading

How Will Ethereum Scale?

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

By: David_Milsont

Currencies

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 https://phillipnunn.co.uk/phillips-blog/

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.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules