It's a layer 2 world, and Ethereum is almost living in it
Crypto

It's a layer 2 world, and Ethereum is almost living in it

When does Ethereum scale? According to Vitalik Buterin, it may already be here.

The nomadic creator of Ethereum tweeted today that “the blockchain network’s layer 2 strategy has basically been successful.”

Major developers of the Ethereum network have seen increased throughput for the network since the break of the month CryptoKittiesERC20 – based digital collectibles of which popularity hid the network in late 2017.

A January 2018 Ethereum Foundation blog post from Buterin identified the problem: “Blockchain scalability is especially difficult because a typical blockchain design requires every node in the network to process every transaction, limiting the transaction processing capacity of the entire system to the capacity of a one node. “

In that same post, he identified two scaling strategies: sharding, which allows transactions without any node to go through every complete transaction, and so-called “layer 2 protocols” in which out-of-chain transactions are performed. The foundation was willing to spend money on the efforts, in the form of grants of $ 50,000 to $ 1 million to people who were either working on existing layer 2 strategies or researching new ones.

At that time plasma and enable channels were two of the most promising systems. However, new solutions have emerged in the past year, such as optimistic rollups and their cousin, ZK roll-ups, left.

Buterin’s tweet came today in response to Philippe Castonguay, a Montreal-based blockchain developer with Horizon Games, which noted that the sheer number of low 2 scale projects has blossomed in the past week and the next month.

A curious addition was the inclusion of Tether’s announcement that it would process transactions on OmiseGo’s network, which at first glance appears to be evidence that the network’s scalability is still an issue. “The Ethereum blockchain is a valuable but limited resource, and that is, under heavy traffic, it is vulnerable to severe network congestion, “the Announcement read. “When the transaction demand exceeds 12 TPS, settlement times increase and gas costs can increase significantly.”

Castonguay said Decrypt that working on the main Ethereum tier is currently simpler and has the most liquidity, but it is not always necessary given the strengths of tier-2 technologies. In the long run, however, he says it should be reserved primarily for things like high-security projects, complex transactions, and for bridging and validating layer 2 chains.

The move from Tether to OMG, which uses a more viable plasma method to execute batch transactions, makes sense in this view. Exchange transactions are not to have the main chain and therefore should not be, the idea goes behind this.

Which layer 2 technology to use instead is a more difficult question. “Some L2s (most of which are live today) only support a subset of what Ethereum can do, such as exchanging tokens or transferring assets,” said Castonguay. “Other L2 solutions (eg Optimistic update package) would allow any application, just like Ethereum L1 (main chain), but these are not live yet. Each L2 solution and implementation also has its own security risk profile to consider. “

According to Buterin, token transfers should continue to evolve to layer 2 solutions because they take up a large portion of the network activity.

For him, the remaining hurdles are not technical in nature – they are about removing them and taking users on board. Referring to the need for users to have plasma or rollup-based portfolios, he said, “This is a challenge for adoption, not a technical challenge. While part of that challenge for adoption is to tighten the warranties so that users will feel comfortable “living” inside and L2 system. “

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James Donald
James Donald writes for the Crypto section of Select News 91. He is an economic expert with a special interest in the unregulated currency system. He believes that the future of the planet lies in the unregulated system and that cryptocurrency is only beginning its journey. Whether his prediction is true or not, his skills certainly show his ability to analyze trends and dissect policy decisions. His column talks about the various cryptocurrencies failing and succeeding in a market that is nowhere near saturation.

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