Scalingnissue ethereum

Follow gckaloudis on Twitter Ethereum supporters have some reason to celebrate this week. Subscribe to get it in your inbox every Wednesday. For those new to the wild world of Ethereum, the Merge signifies the network's long-anticipated shift to a proof-of-stake PoS consensus mechanism — the method by which a decentralized community of computers works to secure the Ethereum blockchain.

This reminder will be obvious to those who have been following this story closely for a while, but it bears repeating for those newer to the space. Changing roadmaps, confusing terminology RIP Eth2 , and Ethereum market-speak have made it hard to pin down what, exactly, the Merge entails. The scaling solutions should enable the blockchain to reach better efficiency and lower the transaction fees while making sure that the performance is not harmed.

The first-layer solutions normally include sidechains and off-chain layers, that are built on top of the main chain and designed to increase transaction throughput. Second-layer ones involve state channels, rollups, blockchain interoperability, sharding, and alternative cryptographic functions. In August, if tThe Merge is not delayed again, the Ethereum blockchain is set to be united with its beacon chain and integrated with sharded chains. Thus, the process will divide the Ethereum network into multiple chains, which is expected to significantly improve throughput and transaction speed.

As a result of The Merge, the Ethereum mainnet is set to become: Faster. Transactions could be finalized as quickly as nanoseconds. A higher number of transactions per second increases the overall rate of transactions occurring on the blockchain. More decentralized. Decentralization and heavy security are two traits that Ethereum is best known for, and thus will remain after the update.

Normally we use this term when we speak of something valuable being converted into a digital token used on the blockchain. Everything you can imagine is able to become a token: from real estate to digital art. Arbitrum , optimistic rollups, and other zero-knowledge ZK rollups opted for sticking to ether as the native asset. Polygon, Metis, and Boba are the most popular among the ones that created new tokens.

If a token or an incentive program is launched, it inevitably draws attention and motivates the users to take part in the process both financially and physically, for instance, by voting for network decisions or investing in its future development. Rollups The main idea behind rollups is to execute the transactions on the second layer which allows to speed up the mainnet and increase efficiency.

There are two main types of rollups: optimistic and zero-knowledge. The optimistic ones are named like this because basically, any validator is able to post a rollup block and confirm the validity of other blocks. If a particular validator finds something suspicious, an inspection can be run to check the state of the block. Ethereum rollups sorted by TVL. The rest of the user transaction fees are distributed to other network participants — such as validators.

In case the block added by the Arbitrum user is proven to be incorrect or a challenge is proven unjustified, the responsible validator will have their stake confiscated, ensuring the participants always play fair or risk the consequences. As for zero-knowledge rollups, or zk-rollups, these Layer 2 scalability solutions allow blockchains to validate transactions faster while also ensuring that gas fees remain minimal.

The transaction speed is reached with the help of Merkle Trees: one stores all accounts, while the other all balances. This off-chain storage of data saves huge amounts of processing power and time for the blockchain. Ether is used as a base coin by both Arbitrum and other rollups to cover the gas.

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A number of technical challenges related to the blockchain, whether a specific one or the model in general, have been identified. The issues are in clear sight of developers, with different answers to the challenges posited, and avid discussion and coding of potential solutions.

Insiders have different degrees of confidence as to whether and how these issues can be overcome to evolve into the next phases of blockchain industry development. Some think that the de facto standard will be the Ethereum blockchain, as it is the incumbent, with the most widely deployed infrastructure and such network effects that it cannot help but be the standardized base.

Others are building different new and separate blockchains or technology that does not use a blockchain like ripple. One central challenge with the underlying Ethereum technology is scaling up from the current maximum limit of 13 transactions per second the VISA credit card processing network routinely handles 2, transactions per second and can accommodate peak volumes of 10, transactions per second , especially if there were to be mainstream adoption of Ethereum.

Some of the other issues include increasing the block size, addressing blockchain bloat, countering vulnerability to 51 percent mining attacks, and implementing hard forks changes that are not backward compatible to the code, as summarized here: Throughput The Ethereum network has a potential issue with throughput in that it is processing only one transaction per second tps , with a theoretical current maximum of 7 tps.

Core developers maintain that this limit can be raised when it becomes necessary. One way that Ethereum could handle higher throughput is if each block were bigger, though right now that leads to other issues with regard to size and blockchain bloat. Facebook handles about k requests per second k users on the site in any given minute, assume an action is taken every 5 seconds. Latency Right now, each Ethereum transaction block takes 10 minutes to process, meaning that it can take at least 10 minutes for your transaction to be confirmed.

For sufficient security, you should wait more time—about an hour—and for larger transfer amounts it needs to be even longer, because it must outweigh the cost of a double-spend attack in which Ethereums are double-spent in a separate transaction before the merchant can confirm their reception in what appears to be the intended transaction.

Layer 2 scaling This category of off-chain solutions derives its security from Mainnet Ethereum. Layer 2 is a collective term for solutions designed to help scale your application by handling transactions off the Ethereum Mainnet layer 1 while taking advantage of the robust decentralized security model of Mainnet. Transaction speed suffers when the network is busy, making the user experience poor for certain types of dapps.

And as the network gets busier, gas prices increase as transaction senders aim to outbid each other. This can make using Ethereum very expensive. Most layer 2 solutions are centered around a server or cluster of servers, each of which may be referred to as a node, validator, operator, sequencer, block producer, or similar term. Depending on the implementation, these layer 2 nodes may be run by the individuals, businesses or entities that use them, or by a 3rd party operator, or by a large group of individuals similar to Mainnet.

Generally speaking, transactions are submitted to these layer 2 nodes instead of being submitted directly to layer 1 Mainnet. For some solutions the layer 2 instance then batches them into groups before anchoring them to layer 1, after which they are secured by layer 1 and cannot be altered. The details of how this is done vary significantly between different layer 2 technologies and implementations. A specific layer 2 instance may be open and shared by many applications, or may be deployed by one project and dedicated to supporting only their application.

Why is layer 2 needed? Increased transactions per second greatly improves user experience, and reduces network congestion on Mainnet Ethereum. Transactions are rolled up into a single transaction to Mainnet Ethereum, reducing gas fees for users making Ethereum more inclusive and accessible for people everywhere.

Any updates to scalability should not be at the expense of decentralization or security — layer 2 builds on top of Ethereum. There are application specific layer 2 networks that bring their own set of efficiencies when working with assets at scale. More on layer 2. Rollups Rollups perform transaction execution outside layer 1 and then the data is posted to layer 1 where consensus is reached.

As transaction data is included in layer 1 blocks, this allows rollups to be secured by native Ethereum security. There are two types of rollups with different security models: Optimistic rollups: assumes transactions are valid by default and only runs computation, via a fraud proof , in the event of a challenge. More on Optimistic rollups. Zero-knowledge rollups: runs computation off-chain and submits a validity proof to the chain.

More on zero-knowledge rollups. State channels State channels utilize multisig contracts to enable participants to transact quickly and freely off-chain, then settle finality with Mainnet. This minimizes network congestion, fees, and delays.

The two types of channels are currently state channels and payment channels. Learn more about state channels. Sidechains A sidechain is an independent EVM-compatible blockchain which runs in parallel to Mainnet. These are compatible with Ethereum via two-way bridges, and run under their own chosen rules of consensus, and block parameters.

Learn more about Sidechains. Plasma A plasma chain is a separate blockchain that is anchored to the main Ethereum chain, and uses fraud proofs like optimistic rollups to arbitrate disputes.